French Wine Declines are Linkable to Agency Profits

French Wine declines linked to agency profits

In 2018, China imported 14.4% less wine from France. The French Wine and Spirits Export Federation (FEVS) announced this. Prior to this, the consumption of French wine by China has been steadily increasing, of which, in 2017, it increased by 25%. For France, such declines are very sensitive. You know, China ranks among the top five markets for French wine sales in the world.
Image Map Showing French Wine Locations

Perhaps the decline in wine imports is related to the slowdown in China's economic growth. In 2018, from many indicators, the Chinese market fell for the first time in 10 years. Sales of cars, smartphones and real estate declined. But it's hard to say that it also touched liquor products. According to Chinese customs statistics, in the first half of 2018, the import of alcoholic products increased by 9.3%, with an increase of 390 million liters. In terms of value, the growth is even more obvious: it reached 1.9 billion US dollars, an increase of 17.6%.

French Wine Image Representation Imagery

Increase in Imports against French Wine Export

The study found that against the backdrop of falling French wine imports, the number of such products imported from other countries, mainly from Australia, Chile and the United States, has increased. In large part, the reason lies in good terms of trade. Among them, after the entry into force of the China-Australia Free Trade Area Agreement, import tariffs on alcoholic products have been reduced by 20-30%. As a result, the total value of Australian wine exports to China increased by 63% in 2017. However, the reason for the increase in demand is not entirely due to the terms of trade. In 2018, the amount of American wine exported to China and India also increased. According to the California Wine Institute, exports to China have increased by 14%. This result also appeared after China imposed a retaliatory 15% tariff on American wine in April 2018.

In addition to state relations, the Chinese people's own tastes and habits are also changing. Zhou Rong, a senior researcher at the Chongyang Institute of Finance of Renmin University, pointed out this in an interview with Satellite News Agency.

He said: "Not only did China's wine imports from France decline in 2018, but from a global perspective, China's wine imports from January to November 2018 fell by 5.1% year-on-year. However, we have overlooked one point, despite the decline in wine imports, However, the import value increased by 10.1%, indicating that foreign wine prices have risen, and China needs higher-quality foreign wines. China is currently one of the top five important wine consumers in the world. In China, wine consumers are not only middle-class Classes and high-end people, many young people also start to consume wine, and middle-aged and elderly people have also joined the ranks of drinking wine for health reasons.
From January to November 2018, Australian exports to China were 29% higher than the same period in 2017. China The share of Australia's export share reached 34.1%, and no country has ever accounted for such a large share of Australia's export. Even when the trade relationship between Australia and Japan reached its peak in the 1980s, Japan only accounted for Australia's export share 28%. Now there is some anti-American sentiment in most countries in the world, but Everyone also acknowledges the quality of U.S. goods. It is also worth noting that the Sino-US trade war was initiated by the U.S. government and not by U.S. companies. The same is true of Australia. The contradiction between China and Australia is reflected in the intergovernmental and It is not possible to see how sharp the contradictions between Australian and Chinese companies are."

French wine sales are down due to high prices. The financial media Caixin wrote. French wine was one of the first wines to enter the Chinese market. This is different from wines from Australia, Chile and South Africa. Correspondingly, the prices of wine purchased from these countries are also much lower. It is worth mentioning that in the Chinese retail market, the price gap has not been felt. That is to say, importers can get more profits when they load from new wine countries. Caixin also pointed out that Chinese consumers are not yet able to distinguish the details of wine tastes. As a result, the reduction in the number of French wines on store shelves does not make Chinese consumers uncomfortable.

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