Datamonitor tips growth potential of wine in China

12-Jan-2011 - Last updated on 12-Jan-2011 at 17:40 GMT

Datamonitor has tipped wine and pre-mixed drinks as promising sectors in China as women make their presence felt in the alcohol market.

China has already established itself as a major consumer of alcoholic drinks and is now ranked first in terms of volume.

In a new report on the Chinese alcohol market, Datamonitor said the country is likely to extend its lead as consumption is forecast to rise from 47bn litres in 2009 to 61bn litres in 2014.

Women and wine

Women are set to play a key role in this growth as a new generation of female workers emerges. Datamonitor said these women have both the means to buy alcohol and feel socially compelled to do so to keep up with their male colleagues.

This social trend is already fuelling growth, especially in the wine market.

Report author Saritha Pingali explained: “The female fast growing consumer segment may create demand for pre-mixed drinks and fruit-based alcoholic beverages like wines in the Chinese alcoholic beverages market as Chinese women are financially more independent but also believe that wine consumption is good for health and promotes beautiful skin.”

Women are not the only factor likely to affect the consumption patterns in the alcohol market in years to come. Politics is likely to be influential.

Reduced import taxes resulting from entrance into the WTO have already encouraged a wave of foreign brands to enter the Chinese market.

Low strength political bias

And now government concern about alcohol abuse threatens to push consumption in the direction of low strength alcoholic drinks.

Datamonitor said Baiju, which has been the favoured alcoholic beverage in China, is now threatened by low-strength alcohols being promoted by the government.

Taxes have encouraged consumers to make the switch. In August 2009, the government introduced a sharp increase in taxes on high strength alcohols, compelling consumers to choose among wine and beer.

With tax and the rise of the woman drinker on its side, wine is set to be the big winner in the Chinese alcohol market. Datamonitor estimates that the per capita consumption of still wines (low strength wines) will grow nearly three times faster than that of the overall sector between 2009 and 2014.