Chinese producers squeezed by falling demand

Falling demand for wine in China, both domestic and imported, is reported to be putting pressure on Chinese wine producers.

With the slowdown in China’s wine scene being felt by producers around the world who are operating in the country, there have been second hand reports of sales falling in domestic wineries too and even of some vines being pulled as they are no longer economically viable.

Wang Zuming, secretary general of the wine division of the China Alcoholic Drinks Association, told the Beijing publication gwm.cn that last winter saw some producers either pull up or simply abandon vines that are now worthless due to falling grape prices.

Meanwhile, Decanter China reported that production fell 14.6% to 1.18 billion litres between 2012 and 2013, while sales dropped 8.5% to RMB40.8bn.

One of the country’s biggest producers, Changyu, saw its net sales and profits plummet 23.4% and 38.4% respectively in 2013.

Again, China’s economic slowdown and the austerity measures of premier Xi Jinping are cited as the cause of this.

CADA noted that between January and November last year, imports and exports of wine related products fell 4.39%, while wine imports into Shanghai are down in the first quarter of this year in both value and volume as were those to Chongqing, one of the biggest wine importing cities in the south-west of the Chinese mainland.