Imported wines to make up half of Chinese market, expert says
That is because domestic wines are facing increasing opposition from European and South American producers, the China Daily reports. Imported wines account for around a quarter of all wines on the Chinese market, with those shipped from France, Spain, Chile, Australia and Italy making up 82 per cent of the total, research from Haiguan.info shows.
Analyst for Rising Securities Zhang Zhiang told the news provider that domestic labels face challenges from overseas producers in the areas of distribution and price. He estimated that foreign wines would make up half of the Chinese market "eventually", although consumers in the region currently remain in the dark on imported wines.
The rise in popularity of foreign wines is set to trouble domestic producers, however, particularly as the economy has suffered weakened growth in 2012. Gross domestic product (GDP) in China expanded 7.6 per cent year-on-year in the second quarter, below the average growth rate of 9.3 per cent. Similarly, quarter-on-quarter growth remained flat in the second quarter at just 1.8 per cent, down from an average of more than two per cent.
Still, China is renowned for its high-end consumers who seek out luxury goods, shedding some promise that demand for foreign fine wines might occur.Investment manager at the Wine Investment Fund Chris Smith argued that where one market closes to growth, another one opens.
"Demand for wine is worldwide, what you tend to see is if the whole economy is struggling in Europe, you have got another economy somewhere else which is booming," he said. "So the demand for one area picks up the slack in another area. You can see prices being relatively stable over time."
This logic can be applied to the Chinese market, where wine imports increased 65 per cent between 2006 and 2010, rising from 114 million litres to 230 million litres.
According to Mr Zhiang, foreign wines tended to make up the high-end of the market but the economic slowdown has driven prices down, making the wines more affordable for average consumers.
A report from China Merchants Securities suggested Chinese wine imports have increased by 50 per cent annually in recent years, the China Daily reveals. Foreign producers might take advantage of a current domestic concern regarding quality by promoting the value of overseas wines. Secretary general of the wine arm of the China Alcoholic Drinks Association Wang Zuming echoed the sentiments of Mr Zhiang. He told the news provider that rivalry between domestic and imported labels has "never been so intense".
Figures from Haiguan.info show a 12 per cent year-on-year increase in imported wines in the first half of 2012, with 200 million litres arriving from overseas. That is in contrast to the seven per cent year-on-year rise domestic producers enjoyed, illustrating a shift in consumer preferences. Fine wine producers would be best advised to aim their products at China's wealthiest citizens.
Mr Smith said: "Fine wine is a luxury good like branded handbags or something, which is demanded by the wealthiest in the population."
- “Winning a silver medal in the HKIWSC has truly helped my product to achieve international credibility regarding its taste. This has positively affected
decisionmaking of several new merchants who now carry my product.”Kaustav BagchiOwner, Lamai Thai Spirits
- “Louis Royer Cognac has been entering the Hong Kong International Wine & Spirit Competition for many years. This competition is regarded as the most respected in Asian countries. Winning an award is a high honour for our brand and a further seal of quality for our multi-award winning Cognac.”Carol FrugierMarketing and Communications Manager, Louis Royer Cognac
- “Adding to our success over the past few years at the HKIWSC, winning a trophy means so much to us as we have just recently entered the Chinese market with our brandies. The Chinese market is unique, which makes it even more exciting to know that Oude Molen VOV Brandy is well accepted.”Kobus GelderblomBrandy Master, Oude Molen Distillery
- “It is a great honour for us to receive this award and we are very thankful about the reputation from wine enthusiasts in China. This award is a testament to the fact that our white wines not only match the traditional Austrian food but also matches perfectly with the Asian cuisine.”Katja PflogschWinemaker, Domäne Wachau
- “Having won three trophies in the last four years in different food & wine matching categories at HKIWSC has showcased Pegeric Pinot Noir and its suitability with Asian cuisines leading to its listing with one of Australia’s top restaurant – Melbourne’s iconic Flower Drum.”Chris CormackCEO, Pegeric Wines
- “To get recognition from such a prestigious panel is
veyrewarding indeed, and proves that our wines are made in a style that is truly food friendly. The HKIWSC has become one of the year’s most well-respected wine competitions globally. For us, the food match component is a fantastic chance to demonstrate how well our wines compliment so many different flavours. Moreover, it is a competition known and valued by our customers so a trophy can be hugely influential.””Susanna MayerWinemaker, Yealings
- “Awards and medals at the HKIWSC have been like a stamp of approval to the quality of our wines. Because it is an Asian-focused competition, I know that my wines are being judged and measured by the same yardstick as all the other wines, given our viticultural conditions are quite unique compared with the rest of the world. These medals give me and, more importantly, my consumers the confidence that my wines stand apart from the competition.”Kalash GurnaniWinemaker, York Winery
- “We are very proud of our results. One of our key focuses is the Asian market, so we really want to make our wines special and desirable for this market. That’s why we want to enter this competition and be evaluated by the expert judging panel.”Sofia Cajewski Winemaker, Cremaschi Furlotti
- “We at Yealands Estate Wines are proud to be
recognizedby the Hong Kong International Wine & Spirit Competition. The organizationis held in the highest regard and our success in the competitions has become a strong voice for our quality around the globe.”Avram DeitchGlobal Marketing Manager, Yealands Wine Group
- “Winning awards in reputable international wine shows such as the Cathay Pacific HKIWSC is one of the many ways of educating our consumers and giving them confidence in purchasing the Saint Clair brand. This enhances brand perception
increases sales across our entire portfolio of wines.”Maria EastonWinemaker, Saint Clair Family Estate anin turn