Slump in China’s wine market forces shake-out, rethink
Mainland wine imports in the first quarter fell 20.7 per cent year on year, forcing suppliers to adopt different strategies to make up for lost sales
The sudden slowdown in wine sales to the mainland is forcing merchants to refine their sales strategies, attendees at last week's Vinexpo trade show in Hong Kong said.
Such moves might include changes to distribution, the introduction of e-commerce and educating a middle-class consumer base deemed vital for the industry's long-term growth.
"We are right in the middle of a major structural change to the business. We need this shake-out and all these unprofessional companies to go into a new business," said Don St Pierre Jnr, co-founder of ASC Fine Wines.
The impetus for change has been President Xi Jinping's anti-corruption drive. The campaign targets conspicuous spending by officials and state-owned enterprises and went down like a corked claret among wine merchants used to seeing the China market as a bottomless vat.
Wine imports in the first three months of this year fell 20.7 per cent year on year to 88 million litres, according to customs data. For all of last year, wine imports dipped 6.8 per cent in value to US$2.4 billion.
Many merchants supplied high-ticket wines and spirits that were used in a thinly veiled form of bribery. Fearful of attracting unwanted attention in the current political climate, the customer base has dried up.