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China’s wine market bubbles, but not with Champagne

The West may toast birthdays and weddings with Champagne, but China still hasn’t found a taste for the bubbly, a new study finds.

China, including Hong Kong, is the world’s fifth-largest wine market, and its thirst for wine is on the rise, according to the report released by wine-trade fair Vinexpo and compiled by International Wine & Spirit Research. Chinese drinkers consumed 159.3 million 9-liter cases of wine in 2011, representing a 142% increase from 2007. What’s more, the IWSR forecasts growth to increase by another 40% over the next three years.

Of all those bottles, 99.5% were red, white or rose wines. That means just 0.5% — or one out of 200 bottles – contained bubbles. “The Chinese ignore the sparkling wines right now,” said Robert Beynat, chief executive of Vinexpo, in an interview in Hong Kong.

To compare, 7% of all the wine consumed in the world in 2011 was sparkling, and the category is set to increase another 9% by 2016. Global consumption of non-sparkling wines, on the other hand, is predicted to increase by just 5% over the same period.

According to Mr. Beynat, Chinese consumers have yet to discover sparkling wines such as Champagne, Cava and Prosecco, mainly because of a lack of marketing in the mainland. He predicts that the major Champagne brands such as Moët & Chandon, Veuve Clicquot and Taittinger will lead a breakthrough in coming years.

“It starts with Champagne,” he said. “The Chinese will start to drink it as an aperitif first, then will move on to other sparkling wines.”

Bubbles or no, China is still far behind the Western world in terms of per capita consumption. Chinese drinkers consumed only 1.4 liters of wine per person in 2011, way below French drinkers who ranked first by downing an average of 53.2 liters per person that year. China’s per capita consumption is predicted to increase to 2.1 liters per person over the next three years.

China is now the sixth-largest producer of wines in the world, higher than Australia and behind France, Italy, Spain, U.S. and Argentina. Mr. Beynat said domestic production is key to growing consumption within China.

“We all prefer products from our own countries,” he said. “Once [domestic Chinese vineyards] produce more, China will drink more, and then they’ll even import more.”

Source: Wall Street Journal