In his paper, Kym Anderson points out that between 2005-2017, China’ share of global wine imports grew fourfold, to 7-8%. But, by 2022, its consumption of wines, both domestically produced and imported, had fallen back to 2006 levels.
What happened?
Before trying to answer this question, Anderson — the George Gollin Professor Emeritus of Economics at the Australian National University and foundation Executive Director of the Wine Economics Research Centre — provides a warning about the ‘uncertain nature’ — some would say opacity — of Chinese wine statistics. There are, he says, “no reliable data on wine stocks in China. Nor are smuggled wine imports from Hong Kong or Macao able to be included in the estimate of China's wine consumption.”
Combining figures from the National Bureau of Statistics of China (NBSC) and UN COMTRADE-based international trade data, however, he concludes that the official numbers coming out of China may actually overestimate current consumption. The blending of imported bulk wine with bottles labelled as ‘Product of China’ and the internal trading of wine between provinces may, he says, lead to “double counting”.
Anderson suggests that the 2m-tonne 'rounded' estimate of 2020 Chinese national production published by the Food and Agriculture Organization of the United Nations may be “several times the correct figure.”
The fall is more than a decade old
For anyone who imagined that the slowdown in the Chinese market could be explained by Covid, the new report shows that per capita consumption peaked in 2012 and fell almost every year after that. Imports have dropped by 55% since 2017 and, while Australia briefly bucked this trend in 2018, its shipments also fell in 2019 and 2021, before the imposition of tariffs almost brought them to a complete halt.
The pandemic did play a role: wine sales dropped by 47% between 2019 and 2022, while spirits and beer only fell by 17% and 3% respectively. Wine consumption in China is predominantly still an on-trade social activity and the lockdown affected its sales far more savagely than other alcohol. But wine sales were already falling before the arrival of Covid and they are continuing to fall since China opened up.
As Anderson notes, “Part of [the] decline from 2013… may be attributable to the austerity measures introduced by President Xi that frowned upon lavish official dinners and other conspicuous consumption and gift-giving, and more recently that also discouraged consumption of exotic/imported goods.” Long-time China-watchers would see the sense in this, given the huge proportion of wine that was previously associated with gifts and hospitality rather than western-style consumption.
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