In July 2021, the Coteaux Champenois red and white wines, first vinified by Louis Roederer in Champagne, were launched in Japan. Named "Hommage à Camille", the wine was sold at the recommended retail price of 41,800 yen (including tax) by the authorised importer and at the same price by several retailers on the internet, with the red wine selling out immediately after its launch. On the other hand, a search for the same wine on wine-searcher.com, the world's leading wine retail price search site, shows that in Switzerland and the Netherlands the wine retails for around 16,000-18,000 yen including tax (at the time of writing).
Exclusive sales and parallel imports
IN THE JAPANESE LIQUOR INDUSTRY, IT IS CUSTOMARY FOR IMPORTERS OF FOREIGN PRODUCTS TO ENTER INTO EXCLUSIVE IMPORT AND DISTRIBUTION AGREEMENTS WITH THE PRODUCERS OF THE PRODUCTS AND FOR THE IMPORTER TO ACT AS THE SOLE DOMESTIC DISTRIBUTOR OF THE PRODUCTS, EVEN MANAGING THE BRAND. BECAUSE OF THE IMPORTANCE OF BUILDING A POSITIVE BRAND IMAGE IN THE ALCOHOLIC BEVERAGE BUSINESS, THE IMPORTER TAKES THE LEAD IN INVESTING IN BRAND ADVERTISING, PROMOTION AND SALES CHANNEL EXPANSION. THE JAPANESE RETAIL PRICE IS OFTEN HIGHER THAN THE INTERNATIONAL PRICE. PARALLEL IMPORTERS SEEK TO TAKE ADVANTAGE OF THIS PRICE DIFFERENCE BY BUYING GOODS, USUALLY IN BONDED CONDITION, FROM IMPORTERS IN THIRD COUNTRIES AND DISTRIBUTING THEM TO MASS MERCHANDISERS WITH NO MARKETING COSTS AND ONLY A PRICE APPEAL. NORMALLY, THE PRICE PAID BY THE PARALLEL IMPORTER IS MORE EXPENSIVE THAN THE PRICE PAID BY THE OFFICIAL IMPORTER TO THE PRODUCER, BUT IN ORDER TO ELIMINATE MARKETING AND INTERMEDIATE DISTRIBUTION COSTS, THE RETAIL PRICE IS LOWER FOR PARALLEL IMPORTS, EXCEPT IN SPECIAL CASES. IN THE LATE 1980S, WHEN JAPAN WAS IN THE MIDST OF A BUBBLE ECONOMY, THE PRICE OF A BOTTLE OF HENNESSY VSOP IN A GIFT BOX SOLD IN DEPARTMENT STORES WAS 12,000 YEN, WHILE PARALLEL IMPORTS IN SIMPLE PAPER BOXES WERE SOLD IN LIQUOR DISCOUNTERS FOR AROUND 3,000 YEN.
In the 1980s, when the market was still small, parallel imports of fine wines were few and far between, although they posed a threat in the case of spirits and a small number of wines for everyday consumption. In those good old days, when Japanese wine importers were bound by a gentlemen's agreement, there was an unwritten rule not to deal with wines already imported by other companies, and with the exception of a small number imported by liquor discounters, there were no "parallel imports" in the wine industry.
The meaning of "parallel import" for the spirits industry is slightly different from that of "parallel import" for the wine industry. Whereas in the spirits industry, which is entirely a brand business, there is always one authorised importer for the major brands, this is not the case in the wine industry. Of course, the same is true for products where brand marketing is important, such as négociants like Georges Duboeuf and champagnes like Dom Perignon. However, some producers who have already achieved a certain level of prestige in the mid- to high-end wine category have relationships with several importers. For example, California's Haut Bon Climat currently works with around four Japanese importers, which allows it to distribute its wines to a wide range of retailers and restaurants throughout Japan. This allows us to distribute our wines to a wider range of retailers and restaurants throughout Japan. It also allows us to maximise our sales by reducing the price at the point of sale, as importers compete on price with each other, rather than having an exclusive distribution agreement with one importer. However, this is not a profitable business for the importer and is only possible for producers such as Haut-Bon Climat and Domaine Claude Dugat, who are in strong demand in the market.
One of the more extreme distribution methods is used by the top Bordeaux châteaux. Almost all of the Bordeaux classified châteaux do not contract importers for each market, but only sell to national distributors via négociants. Conversely, by contacting just two or three major négociants, importers are free to purchase the wines of any classified chateau, whether it be Château Lafite Rothschild or Château Latour. This "Bordeaux Market" system has the advantage of reducing the importer's margins by allowing several importers to compete in each market, and also allows producers to sell their wines worldwide without having to employ a huge sales staff. On the other hand, producers do not know where their wine is ultimately consumed, and brokers can sell to anyone who will pay them, risking the wine becoming a target for speculation.
Auctions (secondary market)
At wine auctions held in Japan, bottles with the official importer's backing generally fetch a premium of 10-20% over parallel imports. The reason why a premium is paid is that the import and storage conditions of the authorised importer, who is in control of the brand, are more reliable. In the 1990s, when Dom Pérignon was consumed in large quantities in Ginza clubs and other night markets, Moët & Chandon's measures against parallel imports were less stringent than they are today, and a large number of parallel imports were available on the Japanese market. Some of these parallel importers, competing on price alone, imported champagne in low-cost dry containers rather than in refrigerated containers, even though the champagne was susceptible to deterioration due to heat. The use of dark glass in Dom Pérignon bottles makes it impossible to check the colour of the wine from the outside, and the seal around the bottle neck makes it difficult to determine the exact height of the liquid. As it is impossible to check the condition of the wine prior to bottling, it is not surprising that a premium is paid for official imports.
Another reason why, historically, genuine imports have fetched higher prices at auction is the lower likelihood of counterfeits. In the case of Romanée-Conti and Château-Pétrus, where forgeries are widely available, the bottles handled by Fiennes Ltd, the official importer of Domaine de la Romanée-Conti, and by the former Jardine Wines and Spirits, which was closely associated with Moueix, the owner of Château-Pétrus, have been sold at a higher price. Bottles could be trusted as long as they were purchased directly from the importer, as they were considered to have arrived in Japan directly from the producer.
However, in recent years, almost all of the fake Romanée-Conti bottles sold on internet auction sites are recycled empty bottles, many of which bear the Japanese label of the official importer. This plays on the consumer's belief that "official imports are safe". These auction sites also sell empty Romanée-Conti bottles, but while recent vintages with the official importer's label can fetch prices in excess of 200,000 yen, the parallel imports remain unavailable.