The top official in China’s alcoholic drinks industry has warned that the country’s wine consumption has hit a bottleneck as its wine industry has “no more retreating ground” after being hit the hardest among all beverage categories during the pandemic.
The stern warnings came from Song Shuyu, Chairman of China Alcoholic Drinks Association (CADA), the official drinks body in China regulating the alcohol industry, at the association’s annaul meeting in Shandong.
In 2022, the total revenue generated from the country’s sizable drinks producers reached RMB 950.9 billion (US$137.6 billion), a 9.1% increase over previous year, while total profits climbed 27.4% to RMB 249.1 billion (US$36 billion), according to data from the National Bureau of Statistics. There are 1756 sizable drinks producers in the country, whose annual revenue averages at least RMB 20 million (US$2.89 million).
However, the whole wine industry’s revenue and profits are lagging far behind. Last year, it only generated RMB 340 milllion(US$49.1 million) in profits, and small- and medium-sized wineries are in a continous state of loss, according to CADA.
Last year, both China’s imported wine and domestic wine production plunged. The country’s wine produciton dropped to 4.2 mhl, conitnuing a 10-year decline. Its wine imports was halved in value compared with 2018. As a result its total wine consumption came to 8.8 million hectolitres, according to data from OIV, after decreasing an average of 2 mhl a year since 2018.
All these have resulted in a bottleneck for wine promotion in the country and the industry’s overall gloom means there’s “no retreating ground” after being hit the hardest among all drinks categories during the pandemic.
The cause for the bottleneck as he explains is a result of overemphasis on the technicalities of wine and the snobbery that comes with wine appreciaiton. Excessive preaching on food and wine matching, ceremonial setting for wine consumption and tasting skills have deterred consumers from wine, he noted.
This type of wine marketing and promotion became particularly old and tired with new generation of young drinkers who opt for easy, approachable and trendy drinks, he adds.
To ease the bottleneck, Huo Xingsan, head of the CADA’s wine division, advocates everyday and casual wine drinking culture. “The industry should be committed to simplify and facilitate the purchase and consumption of wine for consumers, in order to enlarge the overall wine market,” he says.