Chinese wine market becoming ‘normal’

Three years after its crackdown on corruption, China is beginning to behave like any other major wine market – a change that many believe is for the better.

Speaking at ProWine Shanghai last week, Richard Halstead, CEO at Wine Intelligence, said that China was morphing into a more “normal” drinks market, without the distorting influence of state-funded banqueting or the “gifting” of fine wine.

“The anticorruption policies put the brakes on ‘Wine 1.0’, but they have created conditions for ‘Wine 2.0’ to flourish,” he said, drawing an analogy with the step change in the development of the internet.

“Before 2013, the start of the austerity drive, China was about arm’s length purchasing – it was anomalous purchasing behaviour, because the people buying wine were not the people drinking it, and the people receiving it may not have been drinking it either, wine was just being given as a gift; or there was ritualistic drinking around a banqueting suite, which is not a normal way of enjoying a glass of wine,” he recorded.

Continuing, moving to the situation today, he observed, “That is changing… what we are now seeing is a market that is starting to appear like other markets: it is moving to a growing importance on personal consumption; so people are making decisions based on their own tastes, as opposed to buying for another person without much thought as to what it contains.”

Such change, he added, was good for the trade. “Although some say, ‘what about the stock of very nice Bordeaux sitting in a warehouse’, others are saying this is for the better – most of the wine industry are actually quite glad, because it has levelled the playing field a bit.”

Summing up, he said, “What we can clearly see now, three years on from the start of austerity, is a rapidly changing picture, and changes that are possibly better for the world wine community.”

Nevertheless, he warned, “The market [for wine in China] is just at the beginning of its journey.”

Halstead’s views echoed those of Judy Chan, president of Grace Vineyard in China, who said earlier this month that China’s austerity drive had allowed for the “birth of the real consumer”.

Speaking at a conference chaired by Debra Meiburg MW at the Hong Kong International Wine and Spirits Fair, Chan commented, “In the past the people that bought wines were not those who consumed the wines; it was not rational buying at all. In the past if you had relatives or friends in the government you could sell wines, and if you were willing to give kick backs you could sell. Now we are dealing with real consumers who care about the brand story and value of wines.”