Imported China Wine Trade Leads
France Tops in Bottled Wine Yet Chile Leads Bulk Wine Sales to China
Aug 27, 2008
After buying Canada’s top winery Vincor in June 2006, why did the world’s largest wine company Constellation Brands then bump China from the top of Constellation’s near-term expansion plans?
The major reason is that the giant U.S.-based multinational has a history of acquiring wineries in countries that they view as already having a relatively mature market for wine consumption.
In their 2006 annual report, however, Constellation Brands management documented their commitment to one day expand the wine giant’s international footprint into the People’s Republic.
Wine Trade Leads in China For Smaller Wineries
In the meantime, small and medium-sized wine exporters from around the world enjoy immediate opportunities to sell their alcoholic beverages to meet fast-growing Chinese demand for international wine.
For example, the English language version of Alibaba.com lists well over a hundred trade leads from buyers in mainland China plus 40 wine-related prospects from Hong Kong.
The Alibaba Group recently introduced an Export-to-China service that provides global wine exporters who do not speak or write Chinese with an online storefront on Alibaba.com’s Chinese-language marketplace. This online feature enables even tiny wineries to engage an active community with more than 25 million potential buyers and suppliers from mainland China.
Chinese Wine Consumption
Annual wine consumption in the People’s Republic is very low at only 0.3 liters, which is about half a bottle per person. The average French person drinks almost 200 times more (59 liters per person annually), the average American consumes about 40 times more (12 liters) while a Japanese resident averages ten times more (3 liters). Even in Hong Kong, the average drinker consumes 0.8 liters – almost 3 times the amount for mainland China.
With close to one billion potential drinkers in mainland China, many international trade analysts interpret China’s low wine consumption per person statistics as stellar opportunities for future sales growth.
The China Wine Club cites experts who say that the Chinese will eventually consume more wine than Americans, and may one day even challenge France as the world’s largest wine market. Chinese wine consumption is projected to grow by 46% from 520 million bottles (3.9 million hectoliters) in 2004 to 760 million bottles (5.7 million hectoliters) by 2010.
China Wine Imports
Because domestic wine brands dominate some 95% of today’s Chinese wine market, China is a comparatively untapped market for foreign wine makers.
France exports the most bottled wine to China, accounting for about 40% of the Chinese market. In late May 2008, Hong Kong hosted the International Wine and Spirits Exhibition for the Far East known as Vinexpo Asia Pacific. While 31 countries attended, French wine companies occupied almost half of the 7,000 square meters in total exhibition space with 700 exhibitors servicing 7,500 visitors.
In recent years, Australian bottled wines have become China’s second-most popular imported brands with a market share of 20%. American and Chilean wines each generate about 11% of Chinese imported wine sales , followed by Spain (7%) and Italy (6%).
Chantal Chi of Meininger’s Wine Business International reports that Chilean bulk wine exports to China more than doubled in 2007. Chile is now the number one bulk wine exporter to China with a 70% market share, followed by Australian and Spanish bulk wine exports. France ranks fourth among bulk wine suppliers to China.
U.S. Wine Exports to China Accelerate
Foreign trade statistics the U.S. Census Bureau show that American wine exports to China have increased in value by 431% from US$3.1 million in 2003 to $16.7 million in 2007.
Over that same period, U.S. wineries shipped 110% more wine to neighbouring Canada and increased wines sales to the United Kingdom by 33%. Sales of American wines to Japan fell almost 10% last year from 2003, while U.S. wine beverages exported to Hong Kong were down over 20%.
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