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Chinese wine volumes predicted to fall 20% due to coronavirus

Published:  04 March, 2020

The Chinese wine market could contract by 20% or more and many businesses will fail as a result of coronavirus, two industry experts have said.

Although China itself seems to over the worst of the epidemic, the region as a whole is still in turmoil and the drinks trade, in line with other business sectors, is experiencing unprecedented uncertainty and disruption.

As Harpers reported yesterday, Vinexpo Hong Kong has had to be postponed, following the rescheduling of Prowine Asia, originally due to be held in Singapore this month.

“The situation is very precarious. I have been in this market for two decades and I can say that this is far worse than SARS epidemic as back then the Chinese economy was much more robust,” Alberto Fernandez, Familia Torres’ GM of Asia-Pacific, Middle-East & Africa, told Wine Intelligence.

“We expect companies to fail, clients to delay payments and customers to restrict their purchases significantly. We expect that the market will be down at least 20% this year, maybe more.”

David Pedrol, chief executive at Winetobe, a Singapore-based online drinks retailer and former director of the Chinese online retailer YesMyWine, agreed – but added that 20% was a conservative figure.

“The estimation of 20% is assuming the problem goes away now, but we need to be ready for the problem to linger and therefore for the market to experience a bigger drop,” he said.

Diageo has already signalled the crisis will slash £200m from its profits this year, while TWE, which has invested heavily in the Chinese market, has revised its growth guidance for the year downwards.

TWE is already reeling from steep declines in its US division which saw its stock price fall 26% on its latest half-year figures, released in January.