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Bulk Wine to Chinese Wineries 9 replies,5384 views

#1
Hi,

I'm wondering if any other users have had problems with Chinese buyers of wine. I've been in negotiations with a winery in China who are looking for a large amount of bulk wine to be shipped to their company. So far they have supplied all relevant health certifies required by Australian legislation. They seem legitimate, however I have heard from an acquittance about container loads of wine not being paid for or going missing even when there is a L/C in place. I know the basics of what constitutes a L/C but have never used them before and so any help in how I can protect myself would be great. Ideally I would like to have a L/C which is paid once the Chinese winery receives the Bill of Lading, but I'm guessing that buyers prefer L/C which is paid once the container arrives in the port of destination.

Any advice, or tips on where to look for this information would be greatly appreciated.

Regards,
Martin
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#2
Re: Bulk Wine to Chinese Wineries
Replying To  [martinh151]:


Hi Martin.

I suggest you talk to your Bank about this matter. They will be very helpful in advising you. There are quite a few ways that you can structure the LC, as to when payment is made.

The most common one is LC at sight, which means once you ship the goods, you submit all required original documents to your bank, and they in turn, send it to the Buyer's Bank. Once they receive the original documents, they have 5 days to forward the funds to your Bank. As long as the documents are in order and comply COMPLETELY with the LC, the Buyer's Bank HAS to pay. Make sure that all the documents are EXACTLY as the LC calls for the, meaning the SAME wording as is in the LC. For Example, let's say the LC has a spelling mistake and in the LC, the goods are listed as 247 cases of weni (instead of wine). In this case, your Invoice MUST state 247 cases of WENI, EXACTLY the same as the LC, otherwise the Buyer's Bank can refuse the documents as a discrepency.

Then there are LCs at 30, 60 or 90 days, which means they pay 30, 60 or 90 days AFTER the Date on the Bill of Lading.

As I said, talk to your Bank about this and take their advice

Good Luck.


P.S. If you need more info, give me a call. I'm in Gosford NSW

#3
Re: Re: Bulk Wine to Chinese Wineries
Replying to [grigo]:

Hi Grigo,

Thanks for the reply. Is there any type of document which states that the shipping company has received the container and it is ready for shipping (but hasn't been loaded onto a ship yet). As far as I can see a Bill of Lading states that the container has been received and laoded onto the ship. This means that if there are problems under the L/C and I dont receive payment then the container is already on the ship and has already been sent. I would prefer to be paid and have the money in the account before the container is actually shipped, so if I am unable to get payment then i have some recourse.

Thanks in advanced.
#4
Re: Re: Re: Bulk Wine to Chinese Wineries
This is an area that I am no expert but I have an opinion so others may correct (or confirm) my point.

If you have an LC in place then that means that your payment is secure as it is in the hands of the banks not the buyer. So if you offer the BL then the buyers bank has no choice but to release payment. So from a buyers perspective you are protected there.

I would only ship LC at sight especially to a new customer. I can't see any reason that you would want to wait, nor should wait, a longer period of time to collect your payment.

If this is a big order and you are really concerned why not consider having a third party in China check out the buyer on your behalf?
#5
Re: Re: Re: Re: Bulk Wine to Chinese Wineries
I would definitely be using a LC at sight as I would want to get the payment ASAP.

The reason I am skeptical about L/C and want to get the payment before the container is shipped is because the cost of the wine will be >$150,000 and I don't want to end up in a situation where I am that much out of pocket. And I know that even the slightest difference between the L/C and actual documents means the bank doesn't have to make payment. Do you know if banks provide a facility where they check over a L/C for you to ensure that there are no discrepancies on it?

I was planning to use AusTrade to investigate the Chinese company as I think they provide this kind of service for Australian businesses.

Cheers
#6
Re: Bulk Wine to Chinese Wineries
Replying to [martinh151
Good morning!
According to my bank , LC RED CLAUSE irrevocable at sight is a good form of LC since it is good as cash. In my country we can loan that to our bank so we can pay our manufacturers since we can not make credit to our manufacturers side. I hope I can make a business with you sir.

Thanks and hope to hear u.
#7
Re: Bulk Wine to Chinese Wineries
Replying to [martinh151]:

Dont forget that the Bank that open the LC must be an international recognized bank. If it were some local bank that you have never heard before, you better watch out.......
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#8
Re: Bulk Wine to Chinese Wineries
Replying to [martinh151]: I don't know if you are still reading this thread however, heres my answer to you.

It makes no matter what kind of bank opens the L/C as long as the L/C is an Irrevocable, confirmed L/C. The confirming bank from mainland China should only be ICBC - Industrial and Commercial Bank of China, CCB - China Construction Bank, or the Bank of China. No other would be acceptable. If the buyer is buying through an import office in Hong Kong the L/C should be confirmed by HSBC -Hong Kong and Shanghai Bank or RBS - Royal Bank of Scotland only. If you so choose you could also ask for a red clause that would allow for 30% T/T in advance and the balance of 70% "At Sight" by presentation of the draft and documents.

The Red Clause is not needed. But will help you offset the price of delivery to the ship.

One other thing that you should do at any rate is to confirm thru a Chinese lawyer, that in fact the buying company has a license from the Chinese goverment to import wine and spirits. These licenses are highly regulated by the Chinese goverment and are not just available to anyone that applies for one. If your looking for a real and licsensed company you can contact me thru my signature line below this post.

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#9
Re: Bulk Wine to Chinese Wineries

Hi Martin,

 

Just wondering how you got on with shipping bulk wine to china?  I have also been in contact with a company that wants very large quantities of bulk wine shipped.  Your insight would be appreciated! 

 

 

Quoting from [martinh151]:


Hi,


I'm wondering if any other users have had problems with Chinese buyers of wine. I've been in negotiations with a winery in China who are looking for a large amount of bulk wine to be shipped to their company. So far they have supplied all relevant health certifies required by Australian legislation. They seem legitimate, however I have heard from an acquittance about container loads of wine not being paid for or going missing even when there is a L/C in place. I know the basics of what constitutes a L/C but have never used them before and so any help in how I can protect myself would be great. Ideally I would like to have a L/C which is paid once the Chinese winery receives the Bill of Lading, but I'm guessing that buyers prefer L/C which is paid once the container arrives in the port of destination.


Any advice, or tips on where to look for this information would be greatly appreciated.


Regards,

Martin


#10
South African bulk wine exports to China

HI 

 

I'm a South African wine representative in Beijing and I'm looking for a Chinese clients/distributors/importer that is interested to import bulk wine. 

Any suggestions or contacts?

 

Regards

 

Hayley

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