China’s wine and spirits imports in the first half of the year continued to drop amid the country’s stringent zero Covid policy but signs of recovery in wine started to emerge after May while whisky maintains its blistering growth.
It came as little surprise that China’s alcoholic drinks imports plunged from January to June when some of the country’s biggest consumption centers including Shanghai were placed under lockdown for months.
As a result, the monthslong lockdown and lockdown-induced logistics challenges brought down the country’s overall wine and spirits imports by 60.4% in volume to 479.5 million liters and 22.4% in value to US$1.97 billion compared with the same period last year, according to the latest data released by China Association for Imports and Exports of Wine and Spirits (CAWS).
Imported spirits, the bulk of the country’s total alcoholic beverage imports, saw its import value dip by 13.22% to US$856 million during the six-month period. Categories including Brandy, Rum, Gin, Vodka, Tequila all saw various degrees of declines.
Whisky Beats Market Gloom
However, whisky beat the overriding downward trend and registered strong growth in both volume and value, driven by Chinese consumers’ evolving taste for high-end drams.
The country imported 15 million liters of whisky worth about US$233 million from January to June, representing 8.34% growth in volume and 17.89% rise in value over the same period last year. It has become the second most imported spirits category just behind Brandy.
This continues a growth trend that has been recorded since 2019. According to the Scotch Whisky Association, the Chinese mainland has recorded the strongest growth for whisky produced in Scotland, with the total value of this market in 2021 reaching 198 million pounds (US$258 million), a rise of 123% compared with two years ago.
Earlier this year, a direct and “game-changing” shipping route was officially opened between China and Scotland. Among many of the goods on board, Scotch whisky is one of the much-anticipated consumer products. According to reports, in late August, over 1 million bottles of Scotch have left Scotland and are expected to arrive China in a month, halving the usual shipping time of 60 days.
Although the country’s overall wine imports in the first half of the year have yet to fully recover but growths seen in months of May and June managed to help buffer sharp drops.
From January to June, China imported a total of 183.6 million liters of wine valued at US$730.3 million, down by 13.28% in volume and 10.7% in value year on year.
Bottled wine imports, which account for 91% of the country’s overall wine imports, suffered a 19.72% drop in volume to 119.5 million liters, while its value also decreased by 13.1% to US$665 million.
The drops however are more moderate compared with previous data released for Jan-May period, noted CAWS.
What could be encouraging for the country’s wine merchants is a growth trend that has been showing since May. During the month, imports grew by 12.2% in value to US$141.8 million and in June growth continued by jumping another 5% to US$137.5 million, as the CAWS data shows.
The recovery as much as it shows improved market sentiment after gradual easing of lockdown, it might also suggest price trending up, as bottled wine saw double digit price hike in both months. In May alone, unit price for imported bottle wine jumped by close to 20% alone.
In terms of country of origin, France still ranks as China’s biggest wine exporter, with US$315.3 million wines exported to China during the period, representing 43.18% of the market share.
Chile came in second with US$189.1 million wines, followed by Italy (US$72.8 million), Spain (US$51.12 million), the US (US$26.5 million), Germany (US$11.8 million), Argentina (US$11.3 million), New Zealand (US$10.6 million), Georgia (US$8.8 million) and South Africa (US$8.7 million).
Bulk wine imports during the period grew by a staggering 80.9% to US$14.2% but still only constitute around 10% of the country’s overall imports.
Sparkling wine in the meanwhile suffered a 4.5% drop in value to US$7.8 million, deterred by sharp price rises seen in Champagne.