Sales of Chinese-produced wine fall as consumers opt for imported labels

Sales of domestically-produced wines in China, which accounted for more than 80% of volume for a decade and enjoyed continued growth over that period, are declining, says to a new report released by Vinexpo, the world's biggest wine exhibition. In 2015, the Chinese consumed 131.0 million cases of Chinese-produced wine, 7.24 million cases less than the previous year. The slowdown in China's economy last year, high prices, the growing sophistication of Chinese consumers and a lack of communication are all cited as reasons for the falling sales. "Formerly, Chinese consumers blindly followed domestic wines since they cannot read French or English labels on imported bottles, However, when young and well educated middle-class becomes the major wine buyers in China, many Chinese wines found it increasingly hard to compete with the imported labels,” said Stephen Li, a respected wine educator in China.

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CHINA’S wine market, the fifth-biggest in the world, continued slowing last year after a decade of uninterrupted growth has badly affected domestic wines, said a latest industry report.

High prices, market failure to tap the changing taste of Chinese consumers and a lack of communication were cited for the falling sales of domestic wines.

In 2015, the Chinese consumed 131.9 million cases of red wine, 7.24 million cases fewer than in 2014, showed the survey of world wine and spirits consumption by Vinexpo, the world’s biggest wine exhibition for wine and spirits professionals from all over the world held in Bordeaux.

Guillaume Deglise, Vinexpo’s CEO, said the slowdown in growth of China’s economy in 2015, the government’s anti-corruption fight and the rout in the Chinese stock market last summer hit overall wine consumption.

Sales of Chinese wine, which accounted for more than 80 percent of volume for a decade, are declining.

Lu Mengxi, owner of a winery in the Ningxia Hui Autonomous Region, known as “Chinese Bordeaux,” said high prices were to blame for Chinese wines selling badly.

For example, a bottle of Zhihuiyuanshi (a winery in Ningxia) is sold to distributors at 200 yuan (US$30) while the retail price of a normal Bordeaux AOC is 100 yuan on Yesmywine, an e-commerce wine site.

Stephen Li, one of the most respected wine educators in China, blames the market failure to the meet consumers’ changing tastes.

“Formerly, Chinese consumers blindly followed domestic wines since they cannot read French or English labels on imported bottles,” Li said. “However, when young and well educated middle-class becomes the major wine buyers in China, many Chinese wines found it increasingly hard to compete with the imported labels.”

Charles Guo, founder of Winemaster House, a wine marketing consulting firm, cited “lack of communication with consumers” for the failure of domestic wines even as their standing has risen in the world over the recent three years.