China Wine

Pandemic corks China’s wine market in 2020

The country’s domestic wine production suffered a fifth year drop while wine imports plunged both in volume and value, according to the latest official data.

China’s wine market in 2020 was badly corked by the pandemic despite early success of containing the virus spread. The country’s domestic wine production suffered a fifth year drop while wine imports plunged both in volume and value, according to the latest official data.

Wine imports for the whole year of 2020 tumbled 19.9% in value to US$2.83 billion, while its volume dropped by 28.8% to 471.3 million liters compared with last year, according to Chinese research company ASKCI based on figures released by Chinese customs.

The results are largely in line with previous forecasts by industry leaders who predicted the pandemic would shave off at least 20% of growth.

Chinese wine lovers attending a natural wine event in Shanghai (pic: stock image)

However, it’s worthy to note that import value’s drop was less significant as expected and the main reason as wine merchants who talked to Vino Joy News believed was because of late few months’ stockpiling of Australian wines in anticipation of punitive tariffs.

The customs data showed that the drop slowed sharply in the month of September just after China announced anti-dumping investigation into Australian wine in late August, which accounts for roughly 40% market share in China.

Imports onwards from October to December as a result saw encouraging growths in value as merchants rush to stockpile wines right before China slapped up to a combined total of 218.5% (212.1% 6.4%) punitive tariffs for alleged dumping and subsidy.

China announced up to 212.10% anti-dumping tariff on November 27, and another 6.4% anti-subsidy tariff in December.

Chinese wine production

Grape harvest (pic: Internet)

Meanwhile, the country’s domestic wine production for the year of 2020 dropped for the fifth time in a row. Its total wine production last year stood at 413 million liters, a year-on-year drop of 6.1%, despite the country’s vocal call to revive its domestic wine industry.  

However, winemakers from China caution that the drop is mainly a result of volume cuts from large volume producers such as the country’s two biggest wineries, Changyu Pioneer Wine Company and the state-owned GreatWall winery under COFCO.

Zhang Yanzhi, founder of Ningxia-based Xige Estate, has grand ambition to compete with Penfolds (pic: Internet)

Speaking to Vino Joy News, Zhang Yanzhi, owner of Ningxia-based, multi-million winery Xige Estate, which is sometimes compared as China’s Penfolds, explained that production from estate-owned and boutique wineries in regions such as Ningxia did not suffer drops as 2020 did not see adverse climatic challenges.

“The drop was mainly caused by declines from some big brands. For Chinese wine particularly domestically produced fine wine, the data doesn’t offer much guidance,” Zhang commented.

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