For a long time, it’s believed Chinese wine is dominating the domestic wine market in China, responsible for at least 70% of wines consumed, mainly from the country’s two biggest producers, Changyu Pioneer Wine Company and GreatWall.
That doesn’t seem quite to be the case, at least according to the country’s official drinks trade association.
The latest report published by China Alcoholic Drinks Association (CADA) shows the gap between Chinese wine and imported wine is narrowing at least in terms of volume, and the latter is actually leading consumption.
The report released this month at CADA’s committee meeting says both imported wine volume and domestic wine production saw around 10% drop last year, respectively.
However, in terms of volume, the association says, imported wines still have an advantage over domestically produced Chinese wine, taking up roughly 60% of market share compared with some 40% of domestically produced wines.
The report however did not expand to explain how the conclusion is reached, but it appears that the percentage is based on data released by the association after comparing domestic wine production last year (451 million litres or 4.51 million hl) and the country’s imported wine volume (612 million litres).
Domestic wine production suffered the sharpest plunge last year, dropping from 2015’s 1161 million litres to 2019’s 451 million litres as it becomes increasingly difficult for wineries to make a profit.
Imported wines in the country did not fare well either last year, as we have previously reported, due to slowing economy and US-China trade war. But in both volume and value terms, imported wines have been on a yearly upward trajectory for the past five years (an average growth of 4.8% by value), the association notes, signalling some optimism for overseas wineries looking to tap into the market.
It’s not certain yet how this year’s pandemic is going to change the dynamics between Chinese wine and imported wine consumption.
But wine consumption for both categories without any surprise will see sharp drops.
Chief winemaker Shao Xuedong from Chateau Junding in Shandong Penglai spoke at the meeting and bemoaned that the winery’s sales in the first half of the year was only around 20% of what they achieved last year for the same period.
Xinjiang’s Xiangdu winery’s general manager Yang Huafeng added that sales for its wines dropped for about 30-50% from January to June, while profits were further squeezed following price cut and rising production costs.