High-end wine sales slows during economic slump

Sales of high-end imported wines have cooled because of China's slowing economy and the government's crackdown on lavish spending with public funds, industry insiders said on Monday at the three-day China-Guizhou International Alcoholic Beverages Expo.

"The growth of high-end wine imports, especially from France, slowed down in the first half of the year, because of the overall economic slowdown," said Wang Xuwei, secretary-general of the China Association of Importers & Exporters of Wine and Spirits.

"On the other hand, imports in the low-end wine sector have increased. As a result, overall bottled wine imports are still growing."

In the first half, bottled wine imports rose 20 percent in terms of volume compared with the same period in 2012, according to the association. Six countries - France, Australia, Spain, Chile, Italy and the United States - accounted for 90 percent of the imports.

However, according to the China Chamber of Commerce for Imports and Exports of Foods, Native Produce and Animal Products, in terms of value, French wine imports fell 9.3 percent to $280 million, even as imports from other countries such as Spain, Italy, the US and Australia registered gains of more than 30 percent.

Many wine dealers said that sales are sluggish as the cuts on official spending led to less fine French wine coming in.

Wu Hao, director of operations at Beijing-based Monte Trade Co, said fine wine sales have decreased significantly since last year as many distributors have seen a sharp drop in French wine demand from State-owned enterprises.

"Over half of our business used to come from sales of fine wines such as Chateau Lafite and Mouton Rothschild," he said. "But because of the government cuts on spending, we were forced to increase imports of cheaper wines."

Affected by the lackluster high-end wine market, prices of products from leading firms such as Chateau Lafite Rothschild plummeted.

Last year, the price of a 2008 Lafite wine tumbled 53.4 percent to 7,230 yuan ($1,180), and the price of a 2004 Lafite wine fell to 2,850 yuan from 4,900 yuan.

"China's wine market is returning to a rational stage, because we had a price bubble created by speculators with asymmetric information, but China's wine market as a whole will continue to grow in the long term," Wang said.

As high-end fine wines suffer, cheaper wines from countries such as South Africa, Chile and New Zealand have seen a boost.

"New World wines, such as those from Chile and South Africa, have become very popular among Chinese consumers because of their price advantages and fresh fruity taste," said Wang Yuan, general manager of the Shanghai-based Wineriver Co Ltd.

"High prices do not necessarily mean good quality," he added, holding a bottle of South Africa's Clos Malverne.