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China’s top 10 biggest wine importers

The latest figures on wine sales in China show a market back in growth. We look at the performance of the top 10 importers by country.

Bottles of Georges Duboeuf Beaujolais arrive in China

As previously reported by the drinks business, the market for wine in China appears to be experiencing a bounce back, with almost a 50% year-on-year volume increase and 30% value increase, according to official Chinese customs data covering the period from January to September this year.

While sales of imported wine never actually suffered negative growth in China, the rate of increase slowed from 65% in 2011 to just 3% during 2014, following the introduction of austerity measures by president Xi Jingping in 2013.

The main impact of this new political climate has been felt by French fine wine, but more notably in volume terms, domestically produced wine, which has fallen by 16% in the last two years from a peak of 142m cases in 2012 to 119m at the end of 2014.

Nevertheless, imported wine sales are growing faster in volume than value, with almost all imported wine country categories seeing a decline in their average prices, and it is bulk wine that is experiencing the greatest growth, up 100% from January to September compared to the same period in 2014.

Consequently, bulk wine now totals 98 million litres, one third of the 298m litre total imported wine market in China (which in turn is 28% of the domestic wine market, which amounts to 1,071m litres).

The top 10 by volume can be viewed over the following pages.

10. Germany

Share by volume: 1%
Volume: 3m litres (+7%)
Value: US$14m (-10%)
Average price: US$4.44 (-16%)

Germany enjoys a relatively high average price in China, although this is falling as volume outpaces value. With China primarily a red wine drinking market, the potential for Germany should lie with its Pinot Noir (Spatburgunder), which, with its ripe red fruit and soft tannins, should be ideally suited to a wide range of Chinese cuisines.

9. Argentina

Share by volume: 1%
Volume: 4m litres (+35%)
Value: US$16m (+29%)
Average price: US$3.99 (-5%)

Argentina is seeing strong growth in China, although it’s off a relatively small base, while volume is increasing at a higher rate than value.

The country’s focus on red wines is a great advantage in China, although Malbec does not enjoy the same cachet in Asia, as it does in the UK or US.

While Argentina is home to first-rate Cabernet Sauvignon – the most demanded grape in China – it will struggle to compete with Chile, which not only produces high volumes of this variety, but also enjoys a free trade agreement with China, giving Chile zero import tariffs.

8. Portugal

Share by volume: 1%
Volume: 4m litres (+61%)
Value: US$12m (+8%)
Average price: US$2.71 (-33%)

While the volume of Portuguese wine imports to China is growing at an impressive rate, it comes at a cost: Portugal’s has the second lowest average price in China after Spain.

Furthermore, Portugal has suffered the greatest decline in average price in the past year – it has fallen by 33%.

7. South Africa

Share by volume: 2%
Volume: 6m litres (+83%)
Value: US$27m (+84%)
Average price: US$4.12 (+0.3%)

South Africa is proving a powerful player in the Chinese wine market, and is one of only two countries which has seen average prices rise in the past nine months, compared to the same period last year.

It has also enjoyed the fastest rate of volume growth so far this year, up an impressive 83% to total 6 million litres (0.66m cases).

6. The US

Share by volume: 3%
Volume: 8m litres (-15%)
Value: US$39m (-22%)
Average price: US$4.93 (-8%)

The US does not appear to be benefitting from the turnaround in Chinese wine demand this year, and is the only country in the top 10 to be experiencing both volume and value decline, even though average prices have fallen.

5. Italy

Share by volume: 6%
Volume: 18m litres (+23%)
Value: US$64m (+4%)
Average price: US$3.67 (-15%)

As we move into the top five biggest country categories in China there is a big step up in volume, with Italy enjoying double the market share of nearest rival, the US.

While Italy is seeing volumes rise, its average price has fallen, and it’s now lower than all the others in this list apart from Chile, Spain and Portugal.

4. Chile

Share by volume: 12%
Volume: 36m litres (+38%)
Value: US$128m (+36%)
Average price: US$3.51 (-2%)

Benefitting from zero import tariff, and vast volumes of price competitive reds, particularly Cabernet Sauvignon, Chile is one of China’s preferred sources of wine.

Indeed, the country has double the market share of China’s fifth biggest supplier, Italy. The only set back in Chile’s China success story is the low prices fetched for Chilean wine in Asia, partly explained by the large volumes of bulk wine shipped from Chile to China, which are reputedly used to boost the quality of domestic brands.

3. Spain

Share by volume: 13%
Volume: 40m litres (+54%)
Value: US$83m (+11%)
Average price: US$2.07 (-28%)

Spain is a hugely successful volume player in China, primarily due to low prices. In fact, Spain has the lowest average price of any importer to China, almost US$1.50 per litre lower than Chile, which benefits from zero import tax due to a free trade agreement.

2. Australia

Share by volume: 14%
Volume: 42m litres (+59%)
Value: US$322m (+84%)
Average price: US$7.71 (16%)

Australia is notable in this list as the only country to post a significant average price rise in the past nine months compared to the same period last year.

Furthermore, it has the highest average price of all the countries listed in the top 10 (although New Zealand, which is China’s 11th largest category – and therefore falls outside this list – has an average price per litre in China of US$10.52, almost $3 more).

And the future for Australia looks bright – the country has negotiated a free trade agreement with China that will see the import tariff drop to 0% by 2019.

1. France

Share by volume: 43%
Volume: 127m litres (+36%)
Value: US$623m (+34%)
Average price: US$4.91 (-2%)

It will come as little surprise that France is China’s biggest country category, and the extent of its dominance is impressive: it holds 43% of the imported wine market.

Furthermore, it holds the third highest average price of the 10 countries featured in this list – it is only behind Australia and the US.

Nevertheless, it is seeing a small decline in average prices, although this drop is relatively small compared to other countries in the top 10.

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