China's wine industry in robust growth

China's wine industry has maintained a two-digit growth annually in recent years. Currently, the country has about 600 wineries. By the end of 2008, the country had 167 state-owned winery enterprises and others with annual sales exceeding RMB5 million.

According to statistics on the state-owned enterprises and other companies with annual sales revenue exceeding RMB5 million conducted by the National Bureau of Statistics (NBS), China's wine output reached 698,300 kiloliters in 2008, rising 23.4%; and the total industrial output value, RMB19.168 billion, up 27.02%; and sales value, RMB18.322 billion, up 23.75%.

The country's wine output in 2007 was 66.5 tons, up 37% year on year; total industrial output value, RMB15.0 billion, up 22.8%; and profits, RMB1.6 billion, up 23.6%. Of the total output in 2007, the dry wine accounted for 62% (about 32.5 tons). The country's six large wineries produced 39.8% of the country’s total wine output, 51.1% of the total industrial output value.

The wine industry realized RMB15.586 billion in generated industrial output value in the first ten months of 2008, rising 33.44% year on year, RMB15.063 billion in sales value, up 28.65%. The country's imports of wine and such products surged 35% year on year in the first three quarters of 2008.

Compared with other alcoholic products, the wine industry is late in development, and the real development shall be in the recent decade, but it has maintained a rapid growth. The wine output has kept rising to a year-on-year growth of 18.1% in 2006, 37.05% in 2007 and 23.83% in 2008. At the same time, the wine production is high in concentration. According to statistics, the top 10 wine making regions took up 96.26% of the total wine output of the country in 2008, while the top 3, namely Shandong, Jilin and Hebei, accounted for 70.20% of the country's total. With the rapid development in recent years, the wine industry has become a focus of concern by various departments. The governments and enterprises in the wine production areas have increased the investment in wine product, while many non-wine making enterprises and capital funds have turned their eyes to the industry and gradually penetrated into the sector.

However, there still exit problems in China's wine industry. Construction of wine production bases is far from the need of the industrial development, affecting a sound development of the industry. Wine making regions are in lack of the scientific approach of planning in the development of the wine industry, leading to the overheating in some areas. The wine product varieties are too similar, the product mix is not rational, and the product quality is not high in general, having gaps with major wine production countries. The industry is weak in self disciplinary, and industrial standardization cannot keep pace with the need of development.

Imports of wine have achieved an explosive growth in recent years. China's huge market potentials have attracted more wine brands. But, the imported wines have not set foot on China's land in a real term. Among the imports, except very a few brands such as Teau Lafite and Castel, many of them are not familiar to Chinese consumers. The recognition of imported wines is not high among the Chinese consumers. As imported wines have not built up a leading brand to dominate the market, there will be diversified varieties, described as “a hundred flowers blossom” of imported wine products on China market in the future.

Experts predicted that China's wine production and consumption have taken on a “fast track” gradually, with the growth of output and consumption keeping the present speed. The wine production will maintain the present high degree of concentration, while more foreign brands of wine will enter the market, triggering off a fierce competition in the sector.