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Wine & China

Wine & China

Although China is well established as the world's 5th largest wine consuming country, it nevertheless sends out contradictory signals:

- on the one hand, the surface area of its vineyards is constantly expanding. It now has the second largest vineyard in the world. Behind Spain, but ahead of France and Italy.

- on the other hand, its wine production will drop sharply in 2018, after having stagnated since 2014.
After its birth in the 1980s, made possible by the opening of the Chinese market, the wine market was built up at breakneck speed in a destructured manner. It is only since 2013 that the market, more mature, seems to be structuring itself.

There are several reasons for this:

China is a country with a seed alcohol culture;

- The birth of wine culture is recent. It dates back to the 1980s and like all recent trends, it is behaving like a fashion phenomenon, characterised by spectacular increases and consolidation movements.

The fight against corruption is having an impact on premium consumption;

- The seizure of power by Chinese President Xi Jinping in 2013 is quickly followed by a relentless anti-corruption fight. All external signs of wealth are suspect, first and foremost the consumption of major brands of wines and spirits. As a reflex of self-defence, the rich and powerful Chinese stop drinking wine. This is the first stop in the meteoric rise of Chinese wine consumption.

Young people and e-commerce are taking control of wine consumption;

- Particularly exposed to Western culture and the image of luxury it reflects, the younger generation is consuming more wine than the older generation. Today China has nearly 50 million wine consumers! And more and more, purchases are being made online or on mobile phones. It is important to understand that China is several years ahead of the West when it comes to e-commerce.

However, caught between a temporary drop in domestic consumption and increased competition from imports from the old and new world, local wine production is suffering.

Chinese viticulture does not respond to the same macro-economic mechanisms as western viticulture.

Encouraged by the Chinese government, the country has multiplied imports of foreign wines as well as entry-level wines from Chile and more recently from Australia.

Indeed, China has signed trade agreements with these two countries, which allow them to export their wine to the middle country without having to pay customs duties.

In conclusion, China will become a leader in the wine sector within several years with the evolution of this sector via e-commerce and the new wine technologies of the Westerners.

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