China’s wine market failed to pick up steam despite early economic recovery from the pandemic and overall growing consumer spending, as limited business banquets and social gatherings still heavily weigh down the country’s wine consumption volume.
The Chinese wine market continued to contract in size for a third quarter this year, as the latest data has shown, indicating weak growth momentum and longer recovery time as previously expected.
From January to September this year, the country imported US$1.27 billion worth of wines, which is US$569 million less compared with the same period from a pandemic-hit year in 2020, according to data released by Huajing Research.
Import volume likewise took a tumble by 17.7 million liters to arrive at 329.4 million liters.
In the month of September, imports deteriorated, down by 13.4% by value and 9% by volume, signalling an usually tepid demand going into what is usually the busiest season of wine sales in Q4 for National Day, Singles Day, Christmas and next year’s Chinese New Year.
However, based on import data for Q3, China’s top four wine suppliers all registered growths but the gains failed to compensate for the loss caused by Australian wine’s void after up to 218% anti-dumping tariffs that essentially upended Australian wine in China.
Customs data showed that in terms of volume, French bottled wine imports grew by 25%, and Chilean wine imports surged by 36%. Spain further gained 62% in volume and Italy recorded a notable growth of 52% in the third quarter of the year.
Meanwhile, Australia’s wine exports to China plunged by 99% in volume in the third quarter. China officially imposed up to 218% anti-dumping tariffs on Australian wines in March, upending its AU$1.3 billion market in China, which was its most profitable export market.
The decline might be related to more cautious buying from merchants as resurgences of Covid-19 cases became a new normal in cautious openings. Large scale gatherings and banquets that used to drive wine sales are curbed and limited as cases resurface, dampening wine sales.
The recent flare up from northern and eastern China including first tier cities like Beijing and Shanghai have spread out to more cities, raising fears of broader outbreak. This is expected to adversely affect wine sales in the last three months of the year, without a doubt.
