China’s wine production continues to decline despite that consumption is on the up. Total production this year is forecast at 9.78 million hectolitres (mhl), representing a decline of 2.3% compared to the 10.01 mhl produced in 2017.
According to the latest data released by ASKCI Consulting, an independent business analysis and consultancy company based in Shenzhen, China produced 3 mhl of wines in the first five months of 2018. This is a 3.2% decline compared to the same period last year.
In May alone, national wine production was 0.52 mhl, representing a 3.7% decline compared to May last year.
Taking into consideration of China’s monthly production levels in the past years, the ASKCI is forecasting a total wine production of 9.78 mhl in 2018.
If the forecast is correct, this will be the fifth year of decline in China’s wine production in a row.
Despite having the second biggest area under vines at some 0.85 million hectares after only Spain, China is only the world’s 7th biggest producer.
The country had seen years of fast growth in wine consumption and production before President Xi’s anti-graft campaign put a brake on consumption in 2012.
In what is seen as a double whammy to local producers, imported wines started to become popular at the same time, leading local producers to respond by reducing production.
The country’s wine production started to decline in 2014. Between 2014 and 2016, production decreased by a total of 3.5% to 11.37 mhl.
In 2017, there was a further reduction of 1.36 mhl, representing a whopping 12% decline compared to the year before.
Though China’s wine consumption has started to pick up again, analysts believed that wine production would not increase substantially.
This is because many local producers, in the face of serious competition from imported wines, have shifted to producing higher quality wines which limited the quantity produced.