The Chinese will drink more wines from Georgia and Bulgaria in 2017

The Chinese will drink more wines from Georgia and Bulgaria in 2017

As more and more middle-class Chinese develop their wine appreciating skills, the supply figures tend to increase and diversify their demand. After getting familiarized with French, Australian and Chilean wines, which accounted over 50% of all imported cases in 2015 and 2016, the Chinese consumers are now turning to new countries and brands.

A bottle of Bagrationi 1882 Classic Extra Dry from Georgia or a Cypriot Vlasides Cabernet Sauvignon 2013 still sound unfamiliar to 90% of the Chinese buyers. However, the trend is set and supported by the recent trade agreements made between PRC and countries belonging to the 16+1 bloc (Central and Eastern Europe) and Turkey.

Georgia is an absolute leader, with 5.29mln bottles exported to China in 2016, more than double the number achieved in 2015. The total volume of wine exports reached 50mln bottles in 2016, according to National Wine Agency (NWA) of Georgia. The new trade agreement signed in December between Beijing and Tbilisi will boost the growth by removing customs tariffs on 95.5% of all Georgian goods, including agricultural products, wine and mineral water.

Bulgaria comes second having exported 319.2 tonnes of wine to China in 2016 and is followed by 183 tonnes coming from Turkey. Cypriot wines brought 714,000 EUR to over 40 local boutique wineries from China in 2015. 

Despite the economic slowdown, PRC’s imported wine market continued growing in 2015, when the Chinese consumed 131.9 million of 9-litre cases of red wine, according to VINEXPO/IWSR study “The Chinese wine and spirits market with outlook to 2019”. The report estimates 32 million more wine drinking adults by 2020, providing a slow but steady growth. According to the Wine Intelligence survey conducted in 2016, “the number of consumers spending RMB 200 – 299 on a bottle of wine has significantly increased, while the number of consumers spending less than RMB 100 has sharply dropped”.

One of the reasons to choose more expensive wines is the fear of buying low-quality or even fake wines on the local market. Same report estimates the number of wines failing to comply with Chinese customs’ labelling regulations has significantly increased since 2015. Meanwhile, the wealthy Chinese millennials are the ones transforming the wine culture in PRC. They are ready to pay more and drink more frequently, and they are open to new experiments and brands.

Wine merchants from Georgia, Turkey and 16+1 countries need to take into strong consideration the financial hurdles of transactions into and out of China, such as the slow speed, bureaucracy and high fees. Choosing the reliable partner for fast and secure payments will help to optimise your cash-flow cycle and operational liquidity. CM CrossPay moves your money within five days, providing timely foreign exchange conversion, settlement and clearance with real time exchange rates with Bank of China (Hong Kong). Learn more about the platform on cmcrosspay.com

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