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The wine market in malaysia

5260 words (21 pages) Essay in Marketing

18/05/17 Marketing Reference this

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Malaysia is one of the countries which located in South-East Asia. The population of Malaysia is about 28.4 million of people (Department of Statistics Malaysia 2011). Malaysia is a multi-racial society therefore there are few ethnic groups in Malaysia which is Malays, Chinese, Indians, Indigenous and others (U.S Department of State 2011). Guida (2010) has indicated Malaysia comprises mainly of Malays (58%), Chinese (24%), Indians (8%) and natives (10%).

All the Malays that born in Malaysia are born Muslims so according to the Islamic law, Malaysare forbidden to drink any beverage that containing alcohol. Thus, the wines market in Malaysia is mainly target on all the non-Muslim community as their potential customers where it is including Chinese, Indians, as well as expatriates and tourists.In addition, Malaysia is not a country which produces wine. Therefore, people who want to know about the size of the market are required to refer to the volume of importations throughout the year.

Moreover, Australian Trade Commission (2010) had stated that traditionally, brandy was the most popular alcoholic beverages that served in Malaysia. Then it followed by whisky and wine. People are usually served brandy and whisky as celebratory drinks in special occasions such as Chinese New Year or wedding dinner. However, now people have started to shift their preference to wine as it is more affordable and supposed as a healthier choice. Nowadays, more and more people have decided to serve wines for their wedding banquets especially for the modern young couples.

World Health Organization (2004) had indicated there are many teenagers in Malaysia have started to drink alcoholic beverages at an earlier age. There are almost 45% of Malaysian youths who consume alcohol regularly while they are under the legal age which is 18 years old.

Basically, there are two types of Malaysian wine consumers which are the Neophyte or the Connoisseurs. The Malaysian Neophyte consumers have a low level of knowledge in wine because they are still the beginner or they do not have much knowledge in wine. However, they are the main type of consumer for wine beverage. Their choices towards wine are mostly based on the price of the wine. In addition, there are only 5% of the market are the Connoisseurs type of consumers. For the Connoisseurs type of consumers, it has been divided into two groups which are the “gourmet” and the rich consumers. The “gourmet” is referring to the type of consumers who are knowledgeable in wines and they are looking into the quality of product when selecting wine. The rich consumers are referring to those consumers who also made their decision based on the price of the product but they are looking the most expensive one in order to impress their guests.

Besides that, according to Australian Trade Commission (2010), Australia has surpassed France in its export of wine to Malaysia since 2001 because Australian wines have occupied a significant of market share which consist of about 45% to 50%. In January to May year 2010, Australia has showed that a growth of 23.1% where it reaching RM30.1 million (EUR 6.8 million). Hence, Australia is still maintains their strong position as the biggest supplier of wines to Malaysia and occupied a market share of 48.5%.

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Below (Table 1.1) is the amount of total wine import from year 2007 to year 2010 (Department of Statistics Malaysia 2011).

Malaysia: Total Import of Wines

Litre

RM

EUR

2010 Jan – May

2,196,463

62,189,783

14,129,546

2009 Jan – May

1,796,794

46,798,520

10,632,644

2009

5,639,318

137,097,344

31,148,576

2008

5,279,336

128,085,729

29,101,134

2007

6,489,867

143,507,367

32,604,936

Table 1.1 The total import of wines in Malaysia (Department of Statistics Malaysia 2011)

Below (Table 1.2) is the top 10 suppliers of wine in Malaysia for year 2010 (January to May) and year 2009 (January to May).

Malaysia: Top 10 Suppliers of Wines

2010 (Jan – May)

2009 (Jan – May)

RM

EUR

Share

Var. (%)

RM

1

Australia

30,145,756

6,849,129

48.5%

23.1%

24,478,906

2

France

15,359,942

3,489,786

24.7%

112.7%

7,220,094

3

Chile

6,747,111

1,532,947

10.8%

194.5%

2,291,132

4

Italy

2,107,943

478,926

3.4%

44.2%

1,461,995

5

USA

1,605,593

364,791

2.6%

-16.3%

1,917,147

6

New Zealand

1,522,996

346,025

2.4%

152.9%

602,240

7

Spain

1,424,954

323,750

2.3%

67.7%

849,653

8

UK

923,312

209,777

1.5%

-65.5%

2,672,838

9

South Africa

548,222

124,556

0.9%

-59.6%

1,356,503

10

Argentina

272,420

61,894

0.4%

-29.3%

385,153

Others

1,531,534

347,965

2.5%

-57.0%

3,562,859

Total

62,189,783

14,129,546

100.0%

32.9%

46,798,520

Table 1.2 The top 10 suppliers of wines in Malaysia (Department of Statistics Malaysia 2011)

According to Guida (2010), there are 7 factors which attributing to Malaysia’s growing wine market. These factors are included:

Growing trend of wealthy, sophisticated and well-travelled consumers. Wine has becoming a symbol of cultural refinement in Malaysia.

A significantamount of expatriate community.

An increasing amount of tourists.

Wine is being chosen by the younger community as they seen the consumption of wine as being modern and fashionable.

The number of women drinkers had increased while they most preferring white wine to red wine.

The price of wine has becoming more affordable and is supposed as a healthier choice if compared to hard liquor such as brandy or whisky.

Malaysians has increasing the awareness, knowledge and appreciation of wines.

Wine become as a new trend in drinking

Previously, drinking wine is only popular and as a trend in western and Europe countries. However, now wine has become a significant beverage that appears in many nations around the world. Today wine had already started to introduce and develop in Asia countries. More people have easy access to more good wine than ever before. Wine is not just a normal alcoholic drink with a grape taste, but it comes exclusively from the fermentation of fresh grapes.

Wine is made to be enjoyed; sometimes it also can be a good complement for a perfect dining. A bottle of wine can be both a pleasure and an interest, both sensuous and intellectual. A good wine can give people much more pleasure. The pleasure can be measured through three senses, which sight, smell, and taste. A good wine drinker always can add the pleasures of anticipation, comparison, and reminiscence. This satisfaction is used in partnering wine, occasion, food and guests.

Good bottles of wine are not always dependent on the variety of labels, but it also requires skill and knowledge of the people who produce the wine. Wine begins life as an agricultural product, which is nature from grape, which goes through fermentation and left to mature in bottle. Wine is a commodity, the earliest civilizations known it has been traded. Grower, winemakers, wine merchant, these all are ancient and honourable callings.

New Comers in wine production and consumption

First country that introduces wine to the market is come from Europe, especially France. Almost every country in the world knows about the good quality wine that produces in France. As the time changes wine market is becoming a large view in every country. Today, wine is not only produces in France, but it also produce in other countries in Europe, America and Asia Pacific. All countries in the world have started to produce good quality wine and they also supply wine to other countries.

Nowadays, almost everybody in the world is drinking wine. Wine product had becoming a common beverage in the market. People will always drink wine as a part of their dining even sometimes people will purchase wine or keep it for collection. There are so many wines in world, and such widely varying quality of wine, it will link to the complex of buying wine. As these issues, every wine producer in the world is offering different quality of wine in certain price level.

Europe is the Main player

There are so many countries in Europe that is producing good quality wines. Countries like French, Italy, German, and other are popular in producing good quality wine in Europe. Most of the countries in Europe have planted their own grapes in order to produce different types of wine. There are different types of white wines, red wines and sweet wines that been produced in Europe. Every bottle of wine has clearly stated a label that mentioned about the wine origin, wine vintage and also wine producer.

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French wine in every country of the world

France is famous throughout the world for producing the finest, most sophisticated wines. French wines are the standard that all other wines are inevitably compared against. From the classy and sophisticated wines of the Bordeaux Chateaus, to the delicate and sensuous country wines of Burgundy, to the classical bubbly of Champagne, France, more than any other country, defines what we know of as wine. Almost every country in the world is importing wine from France.

The French wine regulatory system is renowned throughout the world as being the oldest, most established, and comprehensive set of wine regulations in existence. The French take their wines seriously. The system is known as Appellation Controlee and is often abbreviated AOC, for Appellation d’Origin Controlee. On the label, the geographic place of origin is typically written between the A and the C, so a wine from Bordeaux would say “Appellation Bordeaux Controlee” on the label.

The AOC mark guarantees that the wine comes from the named place, and is made in accordance with the winemaking styles and methods that are traditional of that place (it also regulates many mundane details that are not interesting to the consumer except for the impact on quality, such as maximum yield per acre, residual sugar level, blend proportions, and more). When you find an AOC Saint-Emilion, you are assured that the wine is exactly what you can expect from the Saint-Emilion region. If you know the wine regions of France, there is no additional guesswork required – the AOC designation will tell you exactly what to expect.

http://captainchang.com/wine/france.html

Italy producing better quality wines

Italy’s glowing reputation with wine is due not only to the fact. Italy is considered as the second largest producer of wine and it offers the greatest variety of types, ranging through nearly every colour, flavour and style imaginable.

Italian producers have moved rapidly to the forefront of world enology, improving techniques to create wines of undeniable class in every region, north and south. Their wines derive not only from native vines, which represent an enormous array, but also from a complete range of international varieties.

Italy, with a population of about 57 million, consists of 20 regions subdivided into 103 provinces that take the names of prominent towns. Each province boasts distinctive foods and wines, which, needless to say, have an inherent affinity for one another. Today, in a world of ever more uniform tastes, Italians retain their customary loyalty to distinctive local wines.

A growing number of these authentic wine products have been officially protected under European Union regulations for DOP (Denominazione di OrigineProtetta) and IGP (Indicazione Geografica Protetta).

The program in Italy is modeled after the successul system of wines of controlled origin, which applies to more than 300 appellations identified by the initials of DOC (Denominazione di OrigineControllata) and DOCG (the G for garantita or guaranteed) and the recently instituted system of IGT (for IndicazioneGeograficaTipica), which applies to about 120 “typical” wines throughout the country.

In the last five or six years, Italian have become more weight and health conscious, especially in their eating’s habits. Due to this, Italy wine is made to go with the food. No meal is served without wine. For ltalian people, they prefer to find a suitable wine for their food, some of their wine also imports from French countries and also Californian wine. Italy countries also import white wine to their country. Due to restricted amount of white wine that is produces in Italy like Soave, Frascati, Pinot Grigio, Orvieto, and Verdicchio. An Italians wine maker also doesn’t put same effort into most of their white wines as they put into red wines.

http://italianmade.com/about-italy/introduction-1.html

American Wine

There are only certain wine producers in America, United States and Canada that are popular in producing wine in America. America’s wines can be considered as a New World wine after European countries. Wine has never been a part of American culture. The average American consumes very little wine compared to the average European. This also due to habit of wine drinking in America last times most of the America drinkers prefer to consume beer and spirits compare to wine.

American wine has been produced for over 300 years. Today, wine production is performed in all fifty states, with California leading the way in wine production followed by Washington State, Oregon and New York. The United States is the fourth largest wine producing country and accounts for 7.2% of the world’s wine production in the world after France, Italy, and Spain. The production in the US State of California alone is more than double of the production of the entire country of Australia.

There are nearly 3,000 commercial vineyards in the United States with at least one winery in all 50 states.

Every state in the USA produces some wines. Most of the states produce at least a few good wines. California is the top producer of wines in the USA with thousands of wineries and many varieties of excellent wines. More than 300 different California wineries market is Chardonnay. California wine has no classification system that resembles the European equivalent. A variety wine is labeled with the predominant grape variety used in making the wine.

California is blessed with a wonderful climate and geography that makes it an ideal place to grow many varieties of wine grapes. California Cabernet Sauvignon is the famous full-bodied red wine made from the traditional Bordeaux grape. California Chardonnay, made from the same grapes used in French White Burgundy and Champagne, is a wonderful dry white wine of excellent flavor and complexity.

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Today American is among the world’s top five wine producing areas and its top-quality products easily rival those of Europe’s fine wineries.

http://www.napavintners.com/about/ab_4_us.aspx

http://www.winedefinitions.com/learningcenter/articles/californiasgrapehistory.htm

http://wineaccommodation.com/unitedstates.htm

Australia Wine

Australia is now the fourth largest wine exporter in the world. It exports about half of the wine it produces – over 400 million liters. In the past 30 years, Australian wines have developed a reputation for quality – especially in certain wine grape varieties. Australia is part of the “New World” of wine producers. Australian viticulturalists have a reputation for being able to blend traditional wine-making processes with innovation in bottling, grape breeding and growing technologies including vine canopies. Australia only produces about 40% of the volume of the USA but yet has 8% of the global export market, while America has 6%. This international success has been explained by a “fruit forward” wine profile. “Fruit forward” is not about sweetness, but about the initial onset of the fruit taste. This has tended to make Australian wine more approachable for new wine drinkers.

The Australian public has long preferred white wine over red. Part of this may be due to the fact that a cold glass of white goes well in a hot climate. However, Australians’ penchant for white is no longer so overwhelming. As Australians have warmed to the idea of producing world-class reds, white wine has lost some of its domestic market share. In 1986, over 80% of domestic table wine sold in Australia was white. Now that figure has fallen below 60%. Australia produces grape varieties in both colors. Of the red grape varieties, the most celebrated are Shiraz (also known as Syrah), Cabernet Sauvignon, Merlot and Pinot Noir. The major varieties of white grape include (in order of volume produced) Chardonnay, Sémillon, Riesling and Sauvignon Blanc.

There are over 50 wine-growing regions in Australia. Over 60% of Australian wine grapes are red. While grapes are now planted in the states of Queensland and Tasmania, most of Australia’s vines are concentrated in South Australia, New South Wales, Victoria and Western Australia.

Popular Places For Wines Purchases

In Malaysia, there are four popular places that can demand wine such as speciality wines shop, hypermarket, duty free shop and dine in places ( restaurant, bar ,bistro , pub and etc.) so that people can demand wines everywhere in the country with different types and prices.

Specialty Wines Shop

Specialty wines shop is a type of retailer which is including import different types of wine from different country. One of the popular wine retailer in Malaysia is “Denise” wine shop. It sells it to consumer or selling in a large quantity for some special event such as wedding ceremony and provides some attractive facilities and services. For example,

Sale or Return Option

Too much wine is always better than too little, to avoid running out during the ceremony the retailer will calculate the total value of goods and refund it at the price that actual paid for any return up to 20% of the total order with unopened bottles.

Glass and Accessories Loan

Suitable glasses which are truly essential for the wine savoring experience befitting is available to loan, and unlike most catering firms or companies it is free service. It works in same way as sale or return. For example, you pay for the value of the glasses loaned up front (using credit card, cash or cheque) and it can full refund when the glasses are returned, unless there are any breakages. Other wine accessories such as chiller buckets and corkscrew openers are available too.

Complimentary Local Delivery and Gifts

Delivery services are provider for the whole order entirely free of charge, including glasses, etc within KL and PJ areas. It strongly recommends that delivery to be arranged for delivery to the venue at least one day before the event. They can arrange all this on time. A free bottle of sparkling wine or confetti poppers will accompanies with the delivery as a compliments.

Choice and Selection

To being the largest wine retail chain in Malaysia, all can be say is, there are a lot of choices and selection can be chosen such as, traditional styles, modern styles, old world, new world, big names, boutique beauties and etc.In the same way, a helpful and professional advice will be included because making a choice from our widest selection in the country can sometimes really quite hard. This is where a well trained “wine advisors” can be save day. The “wine advisors” are one of the best trained in the business, providing practical advice to help you along the way if the consumer are not really sure what they are looking for.

Menu Design and Matching Service

One of the key things about choosing wines is making sure it will go down well with the reception’s menu on the day. Tell the specialist what’s being served and they will make some suitable suggestions. They might even custom design a suitable wedding wines and dine list to consumer to provide them an unforgettable and a proper wedding.

http://www.denisewine.com/service_wedding.asp

Hypermarket

Most of the Malaysia citizens will demand the wine at hypermarket because the price is cheapest if compare with others wine seller. There are few biggest hypermarket in Malaysia can be found a variety of different type of wine from different origin and different price level. The most popular hypermarket in Malaysia are Carrefour, Jaya Jusco, Tesco and Giant hypermarket. This few hypermarket head office are from different country and there are a lot of different branches in Asia. Usually, they can offer good wine in lower price included import wines. For example, Carrefour can direct import from French because its head office is from same country, same as others popular hypermarkets. Normally, the people will going to purchase the wine while they are enjoying their shopping or purchasing some daily needs and the price is cheapest then others. However, the wine sell in Jaya Jusco most of all is direct from suppliers. In Jusco, consumer can have a big choice of wine that they like and it can consider as a big supplier of wine direct to the wine consumer. All hypermarkets also have their own wine store that special sell wine, liquor and other spirits drink.

Dine In Places

Other popular places for demand wine is dined in places which mean restaurant, bar, bistro, pub and etc. People’s can demand it and having it at the same time with the meal. For example, the famous French cuisine or restaurant in Malaysia is Frangipani is possibly one of the best restaurants and the food is good. On the other hand, Frangipani has opened Bibitus, its cosy new wine bar on the ground floor. Bibitus offers a wide range of biodynamic French wines from small producers at very reasonable prices. They always happy to create reasonable packages for all events including outside catering. Such as from romantic dinners for two (they have a few marriage proposals at the restaurant) to fashion events, birthday parties, corporate functions, weddings and product launches and they did well in the event. There are few famous brands that have worked with it. Since they opened in 2001, they have worked with brands such as:

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They provide the wine which is import from French.

Dunhill

Louis Vuitton

Giorgio Armani

Paul Smith

BMW

Porsche

Mini Cooper

For the entertainment places, such as pub, bistro, lounge and bar alcohol is their main factor including wine. Usually, they will sell it per bottles and the price might quite expensive. This is because people can enjoy their wine while listening to the music and communicate with friend for release their stress but most of them are willing to spend it on such places. For example, Quattro is using four season concept such as winter lounge, summer restaurant,winter bar, autumm club which is all using wine and alcohol as the main resources in their business.

http://www.frangipani.com.my/bar.php

Duty Free Shops

Duty Free shops are intention for all travelers which located at International Airports, main towns, ports and at duty free borders. When arriving and departing travelers can purchase the duty free goods that they are entitled for duty exemption. Subject to Customs Duties Order, travelers should pay only a customs duty at a flat rate of 30% ad valorem. In the case of alcoholic beverages, the rate of duty will be based on prevailing Customs Duties Order. There are duty exemption per traveler either residents or non-residents with condition. The condition for non-residents must have intention to visit Malaysia for not less than 72 hours and for residents must returning after an absence from Malaysia not less than 72 hours. However, for Langkawi and Tioman island is only 48 hours. Nevertheless, traveler can demand the wine or alcohol not more than one liter per person. The price might be lower than market because there are no government duty charges during import the wine or alcohol from others state or countries. If the travelers bring in excess quantity of goods exempted, he shall be liable to duty on the excess only.

http://www.5starmalaysia.com/Malaysia-Customs-Duty-Free.htm

The Reasoning of People Consuming Wine

Wines are popular all around the world and come in different countries. While it is common knowledge that alcohol abuse can lead to serious health problems, research has shown that when consumed in moderation, alcohol can yield significant health benefits. However, health benefits are not the main reason that most of the people who drink wine. The majority of drinkers drink because they enjoy the taste, and because they want to be social and fit in with friends at bars and parties. In many social circles it is assumed, if not expected, that people will drink. For underage drinkers, wine consumption is often the result of peer pressure. Some people drink simply to get drunk. Since alcohol consumption in excess of two or three drinks can be harmful, it is unwise to start drinking simply to reap the health benefits of moderate consumption it is easy to accidentally consume more than a moderate amount, negating any health benefits.

There are few categories which are related to the why people consuming wine.

Friend and Family

Wine can be used in socializing which can improve the good relationship among friend and family. Normally, it needs to manage the ordering of the wine to suitable the guest and there are lots of good wines at reasonable prices. It is often posted on the restaurant’s web site or can talk to the wine steward ahead of time. If the turn of wine choice over to your guest. So, wine is one of the skills to maintain a good relation among friends and families.

They can enjoy the wine during the festivals or special day to consume together.

Health

Heart

Moderation in drinking is defined as one to two drinks a day for men, and one drink a day for women. One of the main health benefits of drinking is that when consumed in moderation, it can increase the health of the heart. Those who consume moderate amounts of alcohol may have fewer than half as many heart attacks on average than nondrinkers. The survivability of heart attacks may also be higher among moderate drinkers than those who abstain from alcohol.

Life Expectancy

Moderate alcohol consumption is likely to lead to increased overall longevity and a healthy life. Certain types of alcohol, such as red wine, contain high levels of antioxidants, which are beneficial in the aging process. The downside is that once alcohol begins to be consumed in greater quantities, life expectancy quickly drops, due to the likelihood of becoming overweight and developing other problems such as heart or liver disease.

Dementia

Another potential benefit of moderate alcohol consumption is the delaying of the onset of dementia in old age, such as Alzheimer’s disease. Moderate drinkers may suffer a slower rate of memory loss and slower loss of cognitive function than those who do not drink. The slower the onset of dementia, the longer an individual is likely to live.

Cholesterol

Moderate alcohol consumption has been linked to an increase in HDL, or “good cholesterol” (it helps the body process LDL, which is bad cholesterol), which leads to an overall shift toward a healthy level of cholesterol in the body. There may also be a link between alcohol consumption and lower blood pressure, which could help explain why moderate consumption can promote heart health

http://www.ehow.com/about_5042621_reasons-drinking-alcohol.html

Compliment with Food

Wine can be as a compliment with many types of different cuisine. Majority people will consume it when having a western meal but in Malaysia wine can be compliment with Chinese cuisine too.Wine is an alcoholic beverage made from fermented grapes. The type of grape and even the soil they are grown in affect the type, quality, bouquet and flavor of a wine. Alternatively, it takes a novice wine drinker some time to experiment and develop a palate for certain wines, so in addition to the suggestions below, that must be taken into consideration. A bottle of wine is a wonderful accompaniment a fantastic meal. There are no hard and fast rules for which wine to drink with which type of meal, per se, but there are some basic, common sense approaches to take when pairing a vintage with a meal. In some European countries, people grow up knowing these things, because wine is not a special occasion beverage for them, but a natural and necessary part of their meals. In France, for example, wine nearly always graces the dinner table. To start making good selections of types of wines for different types of meals, it is important to know at least the very basics of which wines are which, because wine varieties run the gamut from light, clear and fruity, to dark, deep rich and red. There are even wines specifically for dessert, and wines that are not meant to be eaten with a meal at all, but to be consumed on their own, in their own right. For example, there are few tips for choosing wine for a meal such as:

White wines

Which are lighter in character than their heavy red counterparts – are served with lighter foods and are typically the types of wines that are served with appetizers or entrees that offer a lighter presentation. Depending upon its environment, white wine can range in flavor from semi-sweet to sour and can have either a heavy or light characteristic. Most often, the flavors that will present themselves are lemon, lime, tangerine, apple, melon and oak. This tends to be a rather dry wine and goes best with strong cheese, appetizers, oysters, seafood with a light or cream sauce, grilled fish, poultry and pork. For example white wine, Chardonnay, White Riesling and etc.

Red White

Due to their heaviness, red wines are generally not served with an opening course, such as an appetizer – although there are exceptions. Instead, these tend to do much better with heavier foods, and are often found in combination with a weightier entrée, such as pasta with red sauce and beef dishes such as:

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Merlot

As a mellow, less harsh red wine, Merlot offers a variety of flavors which include violets, black cherries, plums and oranges. This tends to do best with medium-heavy dishes, among which are strong cheese, pasta with red sauce and beef, but is also one of the few wines that provides a beautiful complement to chocolate.

Beaujolais

This tends to be a light, fruity wine which typically offers a fragrance of bananas,

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