China Wine

Premium alcohol consumption surge in Guangdong in 2020

Guangdong's premium alcohol consumption bucked a prevailing downward trend and managed to report a double-digit growth last year despite the pandemic and consumers' cautious spending.

Guangdong’s premium alcohol consumption bucked a prevailing downward trend and managed to report a double-digit growth last year despite the pandemic and consumers’ cautious spending.

According to data released by Guangdong Alcoholic Drinks Association, last year sales of alcoholic beverage in the southern province achieved RMB 56 billion (US$8.6 billion), a year on year decrease of 3.45%, a much modest drop than expected.

Encouragingly, premium drinks priced RMB 600 (US$93) or above generated a total of RMB 19 billion (US$2.9 billion) in sales, a 26.7% increase over the previous year, despite months of strict lockdown measures that heavily affected on-trade sales.

However, consumption of mid-range and entry-level alcoholic beverages sagged during the year.

Moutai (Pic: shutterstock)

Consumption of alcoholic beverages priced between RMB 100 (US$15) and RMB 600 dropped by 14.86% to RMB 14.9 billion (US$2.3 billion) last year, while low-end alcohol consumption referring to products selling less than RMB 100 declined by 13.33% to RMB 22.1 billion (US$3.4 billion).

The rise in premium alcohol consumption in Guangdong is largely driven by high-end Baijiu, the Chinese spirit, while wine unfortunately underperformed and saw the biggest dip in sales value.

Sales of Baijiu in Guangdong rose by 11.49% to RMB 28.3 billion (US$4.3 billion).

Beer consumption tailed behind at RMB 15.8 billion (US$2.4 billion), ahead of imported spirits’ RMB 6.8 billion (US$1 billion).

Wine saw the sharpest decline in consumption. Sales of imported and domestic wines dropped by 34.62% to RMB 5.1 billion (US$784 million).

Earlier, we reported one of the province’s leading wine merchants Dashui announced it permanently folded business, crushed by economic pains worsened by the pandemic.

Guangdong is the country’s biggest wine consumer by value. The southern province bordering Hong Kong and Macau is the biggest market for wine in China, with US$909 million imports in 2017.

The southern province has the country’s largest GDP among all provinces. The province’s GDP surpassed RMB 11 trillion (US$1.7 trillion) in 2020 for the first time, despite its export-oriented economic model amid the pandemic.

2 comments on “Premium alcohol consumption surge in Guangdong in 2020

  1. Hi Natalie,

    Thanks for the article.

    Please clarify what seems to be a discrepancy in sales and import value between the following two statements
    1) “Wine saw the sharpest decline in consumption. Sales of imported and domestic wines dropped by 34.62% to RMB 5.1 billion (US$784 million).”
    2) “Guangdong is the country’s biggest wine consumer by value…..is the biggest market for wine in China, with US$909 million imports in 2017.”
    1) China – domestic and imports -US$784 Million
    2) Guangdong – imports – US$909 Million

    Your fan,
    Jacques

    • Hi Jacques, the US$784 is sales for Chinese and imported wines in Guangdong province, not the whole country, and US$909 is for imported wines only in the province in 2017. The drop in sales and consumption seems to be in line with overall imports drop that we have been seeing from 2018 onwards. Hope this helps.

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