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Chinese market remains bullish despite suffering Australian exports

Published:  29 May, 2020

China’s relationship with wine during coronavirus had changed for the better, according to Wine Intelligence, allaying fears that lockdown had had a negative affect on the wine category.

China’s 50 million-strong drinking population has seen “dramatic changes to lives and lifestyles”, since the virus first spread out of Wuhan, analysts said.

However, it appears the Chinese imported wine market has remained “bullish”, with both purchase volume and spend rising in the wake of the coronavirus.

“China’s 50 million or so upper middle class drinkers of imported wine have broadly responded to lockdown and associated restrictions by doing similar things as other markets," Richard Halstead, chief operating officer at Wine Intelligence, said.

He added that consumers have been buying a bit more still wine on the whole, while cutting back on other beverages, chiefly spirits and to a lesser extent sparkling wine (which isn’t a big drink in China to begin with).

“However, China is showing some crucial differences. While in other global market, consumer wine purchases have gone up but spend per bottle has fallen, Chinese drinkers said they increased their buying frequency overall for informal non-food occasions, and also spent a bit more per bottle for this type of occasion. The online retail channel appears to have taken the lion’s share of these new purchases, with over half of respondents saying they have bought wine via an online retailer more often during this period.”

The findings, based on consumer purchasing habits, suggest that wine has fared better than expected in China, as drink in this market has been traditionally associated with more formal, in-person social occasions in bars and restaurants.

Earlier this month, Wine Australia released figures showing that Covid-19 has taken its toll on the country’s biggest export market.

Australian wine exports to China in the year to April 2020 dropped to AU$1.136 billion, down from AU$1.148 billion for the previous 12 month period, while the value of exports to mainland China has fallen by 14% during the first four months of the year, compared to 2019.

Other countries of origin seem to be faring a little better.

While political tensions have gone some way to impacting sales of Aussie wine in China, “considerable upsurge in terms of imports of Argentinean wines into China, alongside purchases of wines from New Zealand and Spain”, have helped buoy the Chinese market, World Bulk Wine Exhibition (WBWE) Asia said.

Wine purchase surpassed 35.5 million litres during January to March 2020 versus 37 million litres in the same period in 2019.

“Up to March 2020, wine imports into China accounted for 136 million litres during the year-on-year period, representing only 5% less compared to this time last year. Taking into account the Covid-19 outbreak, these are very positive figures”, WBWE said.