Wine Industry Report

According to statistics, the wine consumption increased drastically in cities and towns around China at an annual rate of increase between 15 and 20 percent. Meanwhile, more and more foreign wineries throng into Chinese market since 2004, and lots of foreign brands emerge in China. The wines come from different countries including familiar wine suppliers such as France, Italy, Spain, Australia, USA etc and others such as South Africa, Chile, Argentina, Hungary, Portugal, Austria, New Zealand and so on. Some observers said: “In the long run, Asia is the major market of world wine, and China is the major market among Asian countries in the future ten years.

Foreign Brands Inject Vigor into Chinese Wine Industry

The tariff on imported wine has been down all the way since China’s entry into WTO. Nowadays, the tariff on imported bottled wine has been reduced to 14 per cent from 43 per cent, and the tariff on imported bulk wine has been lowered to 20 per cent from 43 per cent since January 1, 2005. Accordingly, the greatly decreased tariff boosts the development of foreign wines. And many well-known wineries from USA, Mexico, Australia, France, Italy etc have tapped into China since last year. They have hosted various wine festivals to show their wine cultures in Beijing, Shanghai, Guangzhou and so on. Such kinds of activities have told Chinese consumers drinking wine is to appreciate arts and cultures, and it is a lifestyle that allow them to experience style and taste. In this way, Chinese consumers know more and more about foreign wines and they gradually accepted these imported wines. Furthermore, the wine consumption groups have been further enlarged as well in China.

Obviously, the low tariff makes Chinese distributors more and more competent, which is also a main reason that foreign winemakers enter Chinese market in succession. Besides, the appreciation of RMB also further reduce the wine import costs. At present, the total market share of foreign wines is less than 5 per cent in China, so they still have large development margin in China. The entries of foreign wines make competition fierce, but at the same time, they also bring advanced marketing ideas, local cultures, sophisticated technics and successful planting models. Obviously, that will accelerate the development of Chinese wine industry.

The Potentials in the Chinese Wine Market

Essentially, the real reason that foreign wines throng into China is there are huge potentials in Chinese wine market. At present, the world average per capita wine consumption is 7 litres, USA 45 litres, Argentina 38 litres, while China’s annual per capita wine consumption is only about 0.3 liter.

[Source: China Wines Information Website Trans by Amy HE]