China, Canada, Brazil and Japan Hold Back on Wine Imports

11/02/2014 Americans drinking less foreign wine according to Wine Monitor

The first data from Wine Monitor (Nomisma) on 2013 wine imports for some of the most important wine consumer markets in the world show perhaps unexpected results. After years of sustained import growth in numbers, and in some cases even in volume, the first signs of a downturn are showing.

What are the reasons behind such a decline? According to Denis Pantini, Food and Agriculture Sector Director of Nomisma and Project Leader of Wine Monitor, “taking a closer look, there isn’t a common cause, but different factors which have influenced each single market in different ways. Apart from the strong depreciation of the euro which affected many currencies (like the Brazilian real or the Japanese yen), the only element which seems to equalize almost all of the considered countries is the heavy downturn in the quantity of imported unbottled wine, also stemming from a lower availability of product which, as you may recall, reached the lowest levels in the last ten years in 2012 (258 million hl of wine produced on a world level versus the 268 in the year before and 281 in 2013)”

As for China, after an exponential increase in purchases of foreign wines by Chinese consumers from 1.7 million to 1.17 billion euros over the span of twenty years, 2013 shows a drop of almost 5% with respect to the previous year. Regarding the volume, the percentage drop is more or less the same: 4.4% with respect to 3.77 million hl against 3.94 million, once again referring to 2012. Of those missing 60 million euros, half is from bottled wine while the other half is unbottled. But while this latter type also shows a drop in imported volumes of almost 27% (the quantity of unbottled wine amounts to about one quarter of the total imports in China), in the case of bottled still wine, the quantity has not decreased but rather increased by 5%. In other words there seems to have been a substitute effect between higher priced products and other more “economical” ones (and in all this, the anti-dumping inquiry threatened by Chinese authorities with regards to European wines may have played a “deterring” role against importers). As proof of this trend, the sudden drop from France (-12.5%) in the value of exports of wine bottled in China - which, as a reminder, is the leader with a quota of nearly 50% in this category - favored other competitors, the first being Italy which boosted its own exports by over 11%. The same applies to sparkling wine. Even in this case, France showed the same downturn of 12.5% with respect to an exponential growth in our products, whose export value has almost doubled (+86%).

Source: Ansa