Peconic Bay Winery Exports to Canada, China

is doing its part to cut the U.S. trade deficit, exporting wine to Canada and China under deals signed with the government liquor monopoly in Newfoundland, Canada and a Chinese importer.

On Thursday, the Cutchogue winery shipped 112 cases of its non-vintage Nautique White and Nautique Red wines, worth about $16,000 at wholesale, to the Newfoundland Labrador Liquor Corp., the government-controlled liquor monopoly, which operates 25 corporate stores; and supplies alcoholic beverages to 115 agency outlets and more than 1,600 licensees.

It was a rare opportunity for Peconic Bay. Previously, the only U.S. wines offered on the provincial liquor giant's 140-page official price list came from the West Coast.

"I've been pursuing Canada for a long time," said James Silver, general manager of Peconic Bay, who said that selling to Canada is made difficult by high local taxes that sharply increases the price of wines – often by more than 100 percent. Silver, who previously worked for Bedell Cellars, said he managed to export some of that winery's products to Quebec's liquor monopoly.

Silver said Canadian buyers only buy certain types of wines annually at set times of the year.

Peconic Bay's deal with Newfoundland came from a conversation between Greg Winter, president of the St. John's, Newfoundland, wine brokerage, Dialog Wines and Peconic Bay's wine club manager, Katherine Jaeger, during an American Sommelier Association course.

"It was my hope to move back to Newfoundland – where I was born and raised –at some point and my goal was to bring interesting wines to the market and introduce consumers to them and try to increase enthusiasm about wine in general," Winter said, adding that Jaeger sent him samples of Peconic Bay's Nautique wines. "I thought they were good and the packaging was interesting. I thought that there might be an opportunity for wines from New York State in the market and there really were not any. I presented the wine to the Newfoundland Liquor Corp. and then it just became a bit of a waiting game. It took some time, but eventually I was able to get Jim an order for some of his wine."

Peconic Bay caught the interest of buyers for the Newfoundland agency with its nautical-themed wines, Silver said. Buyers received samples and soon an order for 56 cases of Nautique Red and 56 cases of Nautique White followed.

"That made me extremely happy," Silver said, "I hope the customers in New Foundland like it. They have to drink something with all that seafood."

Winter said the order was not big because Newfoundland's market is a small one.

Silver, for is part, said he hopes the sale would lead to sales to other Canadian provinces and called Ontario, which has a slew of its own wineries, "the holy grail."

Nearly a month before the Canadian order, Peconic Bay, which produces about 7,500 cases of wine annually, shipped 112 cases of wine split evenly between its Nautique and Peconic Bay red products to the Beijing New Long Island Co., an importer. That sale is worth about $19,000, based on typical wholesale prices.

Silver said he's tried many times to sell wine to China, but until recently he had no success. "This is the first time it's gone through," he said, citing Chinese buyers' interest in obtaining low-priced wines. "They want $1-a-bottle wines."

But, Silver said, he was able to convince Beijing New Long Island's president and buyer, Jing Li, to think differently about wine pricing. Jing Li could not be reached for comment.

As a result, Silver said, Peconic Bay's wines are available at Maison Boulud, the Beijing restaurant owned by New York chef Daniel Boulud, and at the China World Hotel near Beijing's Tiananmen Square.

Other Long Island wineries, including , , , and , also have sold wines to Beijing Long Island, according to the Chinese company's website.

Long Island wineries have exported wine for more than a decade. The first shipment, in 1997, involved the sale of 800 cases of red wine by Palmer Vineyards to a Chinese company. Since then, Palmer wines have been exported to Great Britain, Switzerland, Sweden, Norway and Holland. Bedell, Duck Walk, Pindar and Paumanok wineries also have exported wines.

Not surprisingly, 90 percent of all U.S. wine exports are from California. In 2009, the U.S. sold an estimated $912 million or 46.4 million cases of wines abroad, according to the Wine Institute, a San Francisco-based trade group for California producers. Nearly 42 percent of U.S. wine exports are shipped to the European Union. The next top markets were: Canada, Japan, Hong Kong and China. The Wine Institute serves as the administrator of the Market Access Program, an export promotion program managed by the USDA's Foreign Agricultural Service.

According to the New York Wine and Grape Foundation, the Canandaigua-based statewide trade group, there are no specific figures on Long Island wine. Susan Spence, who runs the export program for the New York trade group, said she estimated that less than 15 percent of New York's wine production is exported.

As for Peconic Bay, Silver says he's finally cracked another domestic market, Pennsylvania, where all sales are controlled by a state agency. But what he's really interested in is Massachusetts, where wholesalers have been reluctant to sell Long Island wine.

"I want Massachusetts," Silver said. "I can't get arrested in Massachusetts."