China

China to dominate world wine consumption; Australia has most to gain

By RJ Whitehead

- Last updated on GMT

China to dominate world wine consumption; Australia has most to gain

Related tags: Wine

Asian countries led by China will dominate global wine consumption in the next three years, leading to dramatically changing markets that will see Australia among the main beneficiaries.

The research by wine economists estimates that China's wine consumption will have grown by between 40% and 60% between 2011 and 2018.

"China is set to change global markets for wines dramatically, just as it has been doing and will continue to do for so many other products​," said Professor Kym Anderson of Adelaide University, 

"While rice wine has traditionally been the most common in Asia, income growth in China and a preference swing towards grape wine is gradually changing the region’s consumption situation​.”

Unprecedented growth

China has been rapidly expanding its own production of wine grapes to become the world's fifth biggest wine producer, though expansion in domestic production has not been able to keep up with its growth consumption.

"It is the sheer size of China's adult population, and the fact that grape wine still accounts for less than 4% of Chinese alcohol consumption, that makes the import growth opportunity unprecedented​," said Anderson.

China's net wine imports could have risen by between 330m and 790m litres between  2011 and 2018 once the full impact of China’s recent bilateral free trade agreements with Australia, Chile and New Zealand are felt, according to the study.

"Exporting firms willing to invest sufficiently in building relationships with their Chinese importer, or in grape growing and winemaking as joint ventures in China, may well enjoy long-term benefits from such investments, just as others have done and continue to do for many other products besides wine​," he added.

Austerity no obstacle

Even China's recent "austerity drive" will not be able to hold back the tide of wine demand growth, wrote Anderson and his co-author, Professor Glyn Wittwer of Victoria University, in the research that was funded by the Australian Grape and Wine Authority. 

"The austerity drive has dampened the growth in ultra-premium and iconic wine sales in China, but those quality wines are only a small share of total sales, so we project its impact on the overall volume of wine imports to be minor​," said Anderson.

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