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China's wine consumption has shown a downward trend. According to the International Organization of Vine and Wine (OIV), after peaking at 1,930 million liters in 2017, wine consumption in China has been declining since 2018. The volume dropped by 16.2% YoY to 880 million liters in 2022, making China account for 3.8% of global wine consumption and with a global ranking of No.8.
Due to the abundance of imported wine before, importers faced unsold stocks, leading to the decrease in import volume in 2018 aiming for destocking. In 2020, the COVID-19 pandemic had a significant impact on the wine import industry, causing a sharp decline in both import volume and value, after which wine imports stagnated because of weak wine consumption. In 2022, the import volume and value decreased by 20.9% and 12.3% respectively.
While the total import value is on a downward trend, the import value of bulk wine has been rising in recent three years. On one hand, importers seek to optimize their profits by leveraging bulk wine as a means to reduce procurement costs. On the other hand, they aim to tailor wine packaging and promotion to suit the preferences of local consumers. Therefore, importers import bulk wine and locally package in bottles.
It is also worth noting that the import value of sparkling wine has remained resilient and even experienced a remarkable surge of 47.6% in 2021. This can be, in part, attributed to the burgeoning presence of bistros across major cities in China, leading to the increased demand for sparkling wine.
Old-world wines from traditional European countries such as France, Spain, and Italy dominated the Chinese market for decades. However, because of the preferential tariff and duty-free policies, as well as the shifting drinking habits of Chinese consumers, new-world wines from regions like Australia, Chile, U.S., Argentina, and South Africa become increasingly popular for their fair price, fresh and diverse taste, and drinkability.
From 2017 to 2021, based on import value, the top five wine importation sources include France, Australia, Chile, Spain, and Italy, among which Australia and Chile are new world countries. As the biggest winner among new-world countries, Australia surpassed France in 2019 and 2020, becoming China's largest source of imported wine. Nevertheless, harsh tax penalties were imposed in 2021 on Australian producers who were accused of dumping, which made the wine imports from Australia plummeted. As a result, China’s imported wine market share was re-seized by French and Chilean competitors. In 2022, the top five wine importation sources were France, Chile, Italy, Spain, and the U.S.
From the perspective of import volume, it can also be observed that while old-world wines are still favorable, they no longer dominate the Chinese imported wine market like they used to, as new-world wines from Chile and Australia have become sought-after by Chinese consumers. From 2017 to 2022, the total volume of imported Chilean and Australian wines amounted to 801.6 and 572.4 million liters respectively, ranking No.2 and No.3 behind France with a volume of 863.2 million liters.
Market share of Chinese domestic and imported wine
Despite declines in both volume and value, imported wine has been gaining a larger share in the Chinese wine market. By comparing the volume and value of imported wine with the production and sales of Chinese domestic wine, it can be seen that the market share of imported wine has exceeded Chinese domestic wine in recent years. This is partly due to import duty reductions which enable wine importers to offer lower prices compared to local producers, resulting in intensified market competition.