From WINE SEARCHER – AFP | 29-Jan-2014
China tops world league of red wine drinkers dethroning France as the world’s largest consumer, according to a market survey issued by Vinexpo. 155 milion cases (12 bottles, 9 litres) i-e 1.86 billion bottles of red wine were consumed in China in 2013 – an increase of 136 % compared with 2008. France’s total was 150 million cases, followed by Italy (141 million), the US (134 million) and Germany (112 million). These figures show the ever-growing thirst in China for red wine, due to its perceived health benefits and to the highly symbolic importance of the color red.
“There was a real change in Chinese attitudes, » Vinexpo CEO Guillaume Deglise told AFP. « Vines have been planted on a massive scale and distribution networks have multiplied.”
Between 2007 and 2013, red wine consumption increased nearly threefold in the People’s Republic, while dropping by 18 % in France and 5.8 % in Italy.
When it comes to all types of wine, however, China is the 5th largest consumer, still well behind the United States, France and Italy.
According to Vinexpo, the rising popularity of red wine relates to the fact that in Chinese culture, red is associated with wealth, power and good luck. « In business circles, these three values are fundamental. Red wine is therefore an obvious choice for business hospitality, where partners can drink to each others’ health. » In addition, the country’s flag is colored revolutionary red with gold stars.
© AFP | Love of the colour red in China extends to the popularity of wine.
Deglise pointed out that rise in Chinese consumption is encouraging for French producers, as sales of red wine on home soil are expected to drop by more than 7 percent by 2017, he noted. “Exports become even more crucial as the domestic market cannot absorb the entire production. »
White wine consumption is also on the rise in China, albeit on a much smaller scale. Whites made up just 8 % of consumption in 2011, according to Vinexpo figures. This figure is expected to grow considerably in the next few years, led mainly by female and younger drinkers.
Most wine consumed in China is domestically produced, but imports have become increasingly important. From 2007 to 2013, wine imports increased sevenfold and today they have a market share of 19 %.
The Vinexpo study also reveals that world wine consumption has risen in the last five years, and predicts a growth of nearly 5 % between 2014 and 2017. Asia will lead this increase, followed by the United States. The European wine market is expected to remain fairly stable, with a fall of 0.14 percent predicted.
Pernod Ricard seeking acquisitions in Chinese wine
France’s Pernod Ricard is on the hunt for wine in China, a new area of growth in one of the world’s largest alcoholic-drinks markets now that the nation’s thirst for cognac and scotch has run dry. The owner of Mumm champagne and Jacob’s Creek wines is scouting for acquisitions in Chinese wines, a segment that could tap into the emergence of a new middle class and rapid urbanization, Chief Executive Officer Pierre Pringuet said. « Today, Chinese wine is tiny for us, but 20 years from now? » said Mr. Pringuet looking toward Alexandre Ricard, the heir of the group’s founding family who is due to take over at the helm of the group in 2015. « The potential is there, » Mr. Ricard said. China’s recently discovered fondness for red wine is upending the wine market world-wide.
As competitors Diageo, Remy Martin, and Moët Hennessy, Pernod Ricard has suffered a major sales blow as a result of the Chinese government’s ongoing anti-corruption crackdown. The company said that China year-on-year sales plummeted to an 18% percent decline (18% growth last year). However, in an indication that the middle class is likely to start playing a much larger role in China’s wine and spirits industry, Pernord Ricard said that Chinese consumers are still drinking its mid-range products in large amounts. « The Chinese market is normalizing, » said CEO Pringuet on a conference call with investors. Before, it started at a super-premium category—for example, Scotch whisky at 12 years old and above: »we see today very good development with, for instance, Ballantine’s Finest. » Jing Daily (US)
Pernod Ricard is around five years in to its winemaking project in Ningxia region, around 1,500km west of Beijing. Speaking in London following the firm’s half-year financial results, CEO Pringuet said wine is a better long-term investment bet than local Chinese spirit baijiu. ‘Baijiu is quite closed to foreign companies but, in contrast, wine is much more open and it’s a fast developing industry,’ he said, while premium baijiu sales struggle significantly from government efforts to curb food and beverage spending by officials.
If it wasn’t already clear how much Chinese drinkers love red wine, recent growth numbers as a result of the government’s anti-corruption crackdown should make it pretty obvious. While the campaign has caused high-end alcoholic beverages as a whole—including both wine and spirits—to see major sales slumps, red wine has stood out as a bright spot in the alcohol market. According to a recent report by Vinexpo, wine consumption as a whole suffered a predicament similar to that of high-end liquors such as cognac and baijiu as the government cracks down on luxury gifting and fancy banquets paid for by public funds. When looking at red, white, and rosé wines combined, total consumption decreased by 2 percent in 2013 after growing by 27 percent between 2007 and the previous year. China actually saw a 10 percent decline by value in wine imports from France, which make up 40 percent of all the country’s imported wine. Jing Daily (US)
Yang Lu was born in the city of Karamay in Xinjiang province but raised in Shanghai and has won a string of awards as sommelier at the Peninsula hotel in Shanghai before moving to his present position as group wine director for Shangri-La Hotels and Resorts based in Hong Kong. Now one of China’s most respected sommeliers, Mr. Lu talked with WSJ wine columnist Will Lyons about the unquenchable thirst for fine wine in China, which recently overtook France and Italy as the world’s largest consumer of red wine. “Everyone is buying as much Burgundy as they can,” Mr. Lu said. “The mistake that a lot of Bordeaux people have made is that they think they are too smart. They think that people on this side of the world are rich and can spend like there is no tomorrow but they are wrong.” One reason Mr. Lu believes wine drinking has become so established in China in a relatively short period is its obvious synergy with tea. WSJ (US)