Low-end Chinese wines still dominate domestic market

A joint report by China Alcoholic Drinks Association and research company EXACT Data showed that the majority of Chinese wines consumed in the country are low-end, posing a challenge for Chinese producers who are trying to alter the image of domestic wine.

According to the report that looked at sales data in 2016, domestic wines priced between RMB 25 and RMB 50 accounted for 38.8% of the total sales of wines produced in the country, followed by wines in RMB 50-75 price band (20.24%) and wines in RMB 75-100 bracket (19.03%).

Together, wines priced under RMB 100 took up nearly 80% of all sales from domestically produced wines, posing a challenge for Chinese wine producers who are trying to push for premium quality domestic wines.

According to the report, Chinese wines priced over RMB 300 (US$45) took a meagre 1.58% of the total domestic wine sales, while only 2.28% for wines in RMB 150-200 price band and 3.19% for wines in the RMB 200-300 range.

This is problematic for a country that is ranked as the world’s sixth biggest wine producing country by QIV, but still struggles to become a quality wine producing country. On the other hand, more and more wineries in China’s main winemaking regions such as Ningxia, Xinjiang, Shandong and even Yunnan provinces are pushing for quality wines.

In terms of sales channels for Chinese wines, the report found that off-trade sales through supermarkets account for 30%, followed by 18.16% on-trade channel through restaurants, bars and hotels with the rest being online sale, wine stores and among others.

With the country’s growing appetite for imported wines, its domestic wine production has been dwindling as well. Starting from 2013, the country’s production has been dropping for four consecutive years with a total of 11.37 million hectolitres produced in 2016, according to the report.

Since 2016, the country has 17 different provinces and cities that are making wines. Aside from known regions such as Shandong, Hebei, Xinjiang and Ningxai; Sichuan, Shaanxi, Hunan and Liaoning provinces are also producing wines.

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