*Wine market report -What’s up in China?
Written and compiled by Jean-Charles Letellier 法国人佳伟, CEO of Vinifield
The following information is not good news for wine exporters in China in 2022!
Let’s take a look together at this chart that shows the evolution of bottled wine imports (including sparkling wine) in China: January to May 2022 VS last year
*Attention: the detail by AOC is not shown in this chart
Here are the key points to remember:
– France still remains leader with +de 45% of market share (all AOC included)
– Bad results for French wines with a decrease in volumes of -30.66% and -12.80% in value
– Chile suffers less than France from this downward trend, and sells more expensive wines
– All countries are in the red except Germany and Georgia
-Also noteworthy is the complete absence of Australia,,,, which was for many years one of the main Wine exporters to China.
Australia no longer figures as an exporter to China in the statistics due to the prohibitive tariffs imposed by China on Australian wines
Why is this decline so significant- What is happening in China?
– One of the main brakes on growth this year is the zero covid policy, with successive lockdowns in different cities, but especially the one in Shanghai in March that lasted more than two months (as a reminder: Shanghai is the second richest region in China after Guangdong). The impact on China’s GDP will be insane, it was supposed to land at 5.5% by the end of 2022, economists predict a drop of 1.5%, that is to say 4% growth at this end of this year.
-Another important point: In November 2022, the 20th Congress of the Chinese Communist Party will be held, when a transition of power is officially announced, according to the regulations endorsed in previous decades, after 10 years of rule by the current president, Xi Jinping. But after the constitutional removal of the term limit for the president by himself, there is a strong possibility that Xi Jinping’s term will be extended.
-The conflict in Ukraine also impacts the Asian giant’s economy.
“In other words, nothing will move between now and then regarding the possibility for businessmen to go to China to develop their business.”
The exchange rate is in our favor, why doesn’t it help to export more?
Reminder: 1€ = 6.90 RMB (29.08.2022)
– Many stocks are still unsold in China
– Plethoric offers on some French AOC: Bordeaux for examples
– Importers are in financial difficulties, many of them have gone bankrupt
When can we go back to China?
Chinese citizens have always been able to go back to China even during the lockdown, the problem being the exorbitant price of air tickets in economy class + 10 000 for one person.
For most foreigners, we will still have to be patient and wait until spring 2023 to hope for affordable flights, and to get the visa easily.
This article was written and compiled by Jean-Charles Letellier 法国人佳伟, CEO of Vinifield, French wine merchant, Chinese market expert, Linkedin Creator, and author of many articles on Linkedin.
*This article first appeared on Linkedin and Connoisseur Magazine has reproduced it/aggregated it with the permission of the Author.
