Chinese wholesalers are slashing the price of imported fine wines to cut their exposure in an over-supplied market, according to a report in the South China Morning Post.
Many wines from Bordeaux and other iconic regions are being sold off at below cost, sometimes for as little as one quarter of the list price.
Trouble in the Chinese economy led to a drop in demand for wines last year, after several years of double-digit growth.
Across the economy, imports were down 14.3% year on year in August.
Some 2,000 businesses in the wine trade have closed in Shanghai alone over the last couple of years, the paper reports.
"In 2010 everyone was screaming from the rooftops that China was the El Dorado for wine and you could become a millionaire by jumping into the business," Pierrick Fayoux, Shanghai-based marketing manager at French wine importer VGF China, told the newspaper.
"Now wine is being sold below cost, some is going bad sitting for long periods in poorly maintained warehouses, and decent Bordeaux wines are going for 15 yuan a bottle."
The rapid decline in demand for imported wines is in part due to the country's crackdown on corruption and corporate hospitality.
As Harpers reported earlier this year, the average price paid for business lunches has fallen from US$83 to US$77.
But the decline in domestic spending has been even more precipitous.
Spend on informal entertaining at home has dropped from US$37 to US$26.
Research from Wine Intelligence has revealed that the high price of imported wine is the number one barrier to purchase for one-in-ten wine drinkers.
However, with 40% of imported wine buyers being aged 18-29 there are still opportunities for lower cost New World wines in particular.
Chilean, Australian and New Zealand wine makers are best placed to profit from younger wine buyers looking for quality wines at entry-level price points, given that all three nations have free trade agreements with China.
China is the fifth largest consumer of wine in the world and its wine market is worth some £8 billion annually.
It is the sixth largest market for wine imports by volume and value, worth over £2.5 billion. It also has the second largest area under vines in the world.
Gilles Bogaert, managing director of finance at Pernod Ricard, told Harpers last month: "Although we had some headwinds in China, we are confident that the wine business has some growth potential."