NEWS
CHINA WINE PRODUCTION DROPPED 37% IN 2018, FURTHER SIGN OF A WINE MARKET SLUMP
By David Ma
25-1-2019
China’s wine production dropped by 37.16% in 2018 to 6.29 million hectolitres (mhl), down from 10.01 mhl in 2017, according to data obtained by The Wine Chronicle from China’s National Bureau of Statistics .
The number is much lower than industry forecast of 9.78 mhl. This sharp fall in domestic production, coupled with the earlier reported 8.95% drop in 2018 imported wine volume, present a strong signal that China’s wine market is slowing fast.
However, a careful look at the monthly figures showed that domestic production did pick up more quickly in the last quarter of 2018 after very sluggish production in the first three quarters.
Chinese producers might have responded to the slump in imported wines which started to gather pace from July 2018 by increasing production hoping to increase market share.
Some Chinese producers believe that the current weakness of the Chinese currency will help domestically produced wines to compete with imported products.
China’s wine production has been in continual decline despite having the second biggest area under vines at some 0.85 million hectares after only Spain.
2018 is the fifth year of decline in a row and will bring China down the global wine production league table from 7th to 9th place just after Portugal.
Before President Xi Jinping’s anti-graft campaign in 2012, China had seen years of fast growth in wine consumption and production.
The campaign put a brake on consumption, local producers were seriously affected. In what was seen as a double whammy to them, imported wines started to become popular at the same time, leading local producers to respond by reducing production.
In the face of serious competition from imported wines, many producers have shifted to producing higher quality wines which also limit the quantity produced.
(the writer can be contacted at: DavidMa@thewinechronicle.com)
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