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Research Report on Chinese Wine Industry, 2010-2011

(CRI-Shanghai, http://www.shcri.com/reportdetail.asp?id=455 )Chinese wine industry has entered the high-speed growth stage in recent years. Though the international financial crisis broke out in 2008, it did not place severe influence on Chinese wine industry. In 2008, Chinese wine production totaled 698,300 kiloliters, 5% increase over 2007. In 2009, Chinese wine production amounted to 960,000 kiloliters, rising by 37.48% YOY.

Wine belongs to the fast moving consumer goods. The competition on Chinese wine market concentrates on the market capacity and channels instead of product function, attribute and technology. Channels have become the key successful factor for competition. In China, the consumption channels for wine mainly include two categories – restaurants & hotels; retail channels such as shops and supermarkets. According to the statistics of the wine industry, the restaurants and hotels account for over 50% shares in Chinese wine market while retail channels occupy less than 50%. Among those retail channels, supermarkets and general merchandise stores take up over 50% while the rest are shared by convenience stores, exclusive stores and independent food stores, etc.

The concentration in Chinese wine industry is much higher than that in the beer and liquor industries. The sales volume of ChangYu, Great Wall and Dynasty has occupied over 40% on Chinese wine market.

China enjoys the highest wine consumption growth rate in the world. Since the 21st century, the wine consumption in those traditional wine consumption countries does not see obvious increase while Chinese wine market achieves prominent growth in the wine sales volume. With the improvement of the living standard, more consumers in China will choose import wine, attracting the entry of many international wine enterprises into Chinese market.

In 2009, Chinese wine import volume and value amounted to 171,231,332 liters and USD 441,697,229, increasing by 4.93% YOY and 22.91% YOY respectively. In 2009, Chinese import volume and value of bottled wine (no more than 2 liters each) reached 91,025 kiloliters and USD 377.11 million, rising by 58.3% YOY and 36.7% YOY separately. In the previous four months of 2010, Chinese import volume and value of bottled wine came up to 41,809.10 kiloliters and USD 177.51 million, growing by 76.5% YOY and 91.1% YOY respectively.

Import wine in Chinese market mainly includes the import bottled wine with original packing, the foreign bottled wine filled in China (foreign wine, foreign brand and filled in China) and the import base wine blended and filled by domestic wine enterprises and labeled with domestic brand (blending of foreign and domestic wine, Chinese domestic brand). Presently, the sales of import bottled wine account for over 5% in Chinese wine market, which is mainly provided in high-end markets such as star hotels and high-end clubs. In China, import wine is mainly distributed by wholly foreign-funded or joint venture sales companies and domestic small traders or distributors. Plus the import base wine blended and filled by domestic wine enterprises and labeled with domestic brand, the import wine takes up over 15% shares on Chinese wine market.

With superior advantages in raw material quality and cultural content, import wine has dominated Chinese high-end wine market. Import wine brands on Chinese market are mainly from France, Italy, Spain, Portugal, Germany, USA, Canada, Chile, Argentina and Australia, etc. The import wine volumes from France, Australia, Chile, USA, Italy and Spain, etc rank among the Top in China.

Chinese wine market is mainly occupied by medium-end and low-end domestic wines. Import wines impact home-made wines in price, quality and variety as well as encourage the improvement in the overall consumption level and volume of Chinese wine market.

In 2009, Chinese wine market was mainly dominated by the full grape juice wine. The dry and semi-dry wines accounted for over 50% in the market. Among dry wines, dry red wines occupied 80% while the rest 20% were taken up by dry white wines. Chinese wine product composition is gradually becoming rational.

Chinese grape wine enterprises represented by ChangYu, Dynasty and Great Wall have become the leaders in their own regional markets. ChangYu occupies an ascendant position in Shandong, Guangdong; Great Wall leads the wine market in North China; Dynasty has realized the high market share in Shanghai.

Many regional wine brands in China also enjoy high-speed development, including Weilong and Harvest in Central and South China, Suntime and Yunnan Red in West China and Tonghua dry red wine in Northeast China.

Chinese wine price is on the upward trend gennerally. With the popularization of the wine culture and the improvement in the consumption concept and capacity, the prices of mainstream wines in China have been raised from 20-40 CNY/bottle (750ml) to 30-60 CNY/bottle (750ml) by 2010.
With over years’ market cultivation, the healthy and fashionable wine drinking culture has gradually been accepted by Chinese consumers. The consumption demand for wine in China increases continuously.

Through this report, readers can acquire more information:
- Status quo of Chinese wine making industry
- Import and export of Chinese wine industry
- Consumer behaviors in Chinese wine industry
- Chinese wine sales channels
- Major enterprises in Chinese wine industry and their operation
- Influence of international financial crisis on Chinese wine industry
- Competition of import wine products in Chinese market
- Investment opportunities in Chinese wine industry
- Contacts of major wine making enterprises in China

Following persons are recommended to buy this report:
- Wine producers
- Wine importers and exporters
- Wine distributors
- Wine packaging enterprises
- Investors concerning the wine industry
- Research institutes concerning the wine industry

About the Author

Based on the database, Interviews and research methods from China Research and Intelligence, CRI analyzes the development and opportunities in this industry clearly. Contacts: Eileen Gu China Research and Intelligence www.shcri.com Email: eileen@shcri.com TEL: 86-21-6852-1029 86-21-5842-6733

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