Exhibitors at a wine fair that opened in Hong Kong yesterday expect a tough year ahead for the mainland market, especially for top-end wines whose sales are being dragged down by anti-corruption measures.
More than 1,300 exhibitors of wine and spirits - including 250 newcomers - have joined the Vinexpo at the Convention and Exhibition Centre this year, up from 1,000 at the last biennial exhibition in 2012.
Space for the three-day fair running until tomorrow has increased 50 per cent from the 2012 event, and now covers two floors instead of one.
Despite the larger presence, exhibitors have reservations about sales this year.
Bordeaux Vins Selection, which manages 200 Bordeaux brands, said it had seen less demand for top wines.
"We are ready to adjust prices by 10 to 20 per cent," representative Bernard Pujol said.
His gloomy forecast came as mainland customs reported declining wine imports in the first three months this year. Total volume fell 20.7 per cent year on year to 88 million litres. Total value was down 26.2 per cent to 3.09 billion yuan (HK$3.88 billion).
It was a further deterioration from last year, when wine imports dipped 6.8 per cent in value to US$2.4 billion, and 4.6 per cent in volume to 410 million litres. The average import price per litre was US$5.90 - also slightly lower than two years ago.
Another Bordeaux importer, Advini, is focusing more on sales of affordable mid-range wines - priced at 98 to 188 yuan - to families for everyday consumption. As for the priciest ones, it will be a year of brand building instead of fast sales, said regional sales manager Andy Sun.
Other regions are aiming to maintain current sales or limited growth, saying they are not as affected by anti-corruption measures on the mainland.
Italian Trade Commissioner Paola Guida said imports to Hong Kong had increased this year as the country benefited from people shifting from expensive to more affordable wines.
Spanish dealer Gonzalez Byass expected growth of about 5 per cent on the mainland this year, down from double digits in the past few years.
Mainland wineries Dynasty and Grace Vineyard expected the market to stabilise.
Dynasty winemaker Lv Wen said mainland wines remained competitive in the mid to low-end market. The brand plans to launch low-end brandy this year.
"This year we have reached a plateau," Vinexpo chairman Xavier de Eizaguirre said of the mainland market. But he was upbeat about long-term development. "We just reached the tip of an iceberg [in demand]."
According to a study by International Wine and Spirit Research, Chinese wine consumption is expected to rise by one-third in the five years to 2017.
De Eizaguirre declined to say whether he believed growth would pick up this year or next, but said there was plenty of room for growth. Wine consumption per person in China was about 1.2 litres a year, compared with more than 10 litres in the United States and 50 litres in France, he said.
He added anti-corruption measures had hit the top end but the growing middle class would support mid-range wines. The fair started in Bordeaux in 1981, and eight Asian fairs have since been held. Six, including the latest, have been in Hong Kong.