Customs vs customers: How much wine entering China actually gets drunk?

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By Jim Boyce

We have seen more than a decade of media stories about the phenomenal wine import growth in China. But rare are those that address whether the amounts of wine recorded by China Customs jibe with the amount of wine purchased — let alone drunk — by consumers. For example, bottled wine imports increased by 60 percent in the first half of 2011. Can we reasonably assume consumption will rise that much in the near future? Here are a few things to consider:

• The number of importers has grown dramatically in the past ten years and there are now at least several thousand. How many, especially those smaller operations new to the business, have been able to find distribution channels for their wine?
• Along those lines, several major distributors tell me they believe quite a bit of imported wine ends up indefinitely in warehouses. How much? It is impossible to say but I have heard estimates of 10 percent or more.
• The number of outlets that sell wine has also grown rapidly, whether that means shops, supermarkets, bars, clubs, restaurants or hotels. How much wine that enters China goes to stock those places? And how much of that stock gets moved? This is but one anecdote but it seems some people are having trouble moving wine in Zhengzhou.
• Along those lines, I have visited dozens of wine shops in Beijing over the past couple of years: at least half of the time I am the only customer and rarely do I find more than a handful of people. I have also witnessed few people buy wine at supermarkets or hypermarkets unless it is linked to some event, such as a wine fair or as gift-giving for holidays.
• Gift-giving issue brings up another issue:  How much wine is imported, how much wine is purchased and how much wine is drunk. Again, this is anecdotal but I have several friends with growing stockpiles of wine at home, due to gift-giving, who are unlikely to ever open those bottles.

I do not doubt that wine consumption is rising in China. Wine has certainly become more popular during social events, such as business meetings and weddings, and I do see more people drinking wine in bars and restaurants. I simply want to provide some drink for thought for those who assume imports equal purchases because there are compelling reasons to think there might be a gap between the amount of wine going through Customs and the amount of wine ending up in customer hands — and mouths.

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