China's wine production down by nearly 40% last year as consumers switch to imports
Wine production in China plummeted by nearly 40% last year, a fall from 10.01 million hectolitres in 2017 to 6.29 million hectolitres, the largest drop ever recorded.
Two years ago the country was the sixth largest global wine producer according to the OIV but last year’s much lower than forecast volumes saw it drift to ninth place in the rankings, just ahead of Portugal’s 5.3 million hectolitres.
Production has been declining in China for the past five years, but last year’s drop is the sharpest on record, indicating that demand amongst Chinese consumers for domestic wine is on the wane.
China was one of only three top wine producing countries to record a drop in production in 2018, along with Australia, which was down by 9% to 12.5 million hectolitres after two bumper harvests, and South Africa which dropped 12% to 9.5 million hectolitres as a result of the drought.
Elsewhere, worldwide production generally experienced an increase of volumes, up by 31 million hectolitres to 282 million hectolitres compared with a very low-yielding 2017, according to OIV figures.
This drop is likely to act as a disincentive to smaller producers within China that have been slowly improving quality over the years in Ningxia, Xinjiang and other parts of China.
Competition from imported wines is the main factor which has been impacting adversely on China’s domestic wine production. However, last year imported wine growth also saw a slowing off amid the country’s economic slowdown and uncertainties caused by the US/China trade war, with imported wine voumes down by 8.95% to 716.5 million litres.
Overall import value levels were approximately in line with 2017 with only a slight 1.1% increase to US$3.54 billion for both bottled and bulk wines, according to customs figures.
Four of China’s top five importing including France, Australia, Italy and Spain saw dips in export value. China has more than 1,000 SC-certified wineries across the country from the biggest wine producing region in Shandong peninsula in eastern China to the country's premier wine region Ningxia in northwestern China to Yunnan in southwestern China, home to LVMH's Chinese wine, Ao Yun.