ProWine China opens to tough times for fine wine

(Decanter) - The austerity-filled atmosphere hanging over China's fine wine sector shows little sign of clearing, but many remain optimistic for the longer-term.

Many of China's major wine importers are finding the sector hard-going in 2013. In a number of cases, year-on-year values sales are either flat or in slight decline, with lavish spending on the best Bordeaux chateaux less common than in more prosperous times.  

While some of the problems are due to a general fall in prices for Bordeaux en primeur over the past two vintages, the new Chinese government's clampdown on officials' entertainment budgets and a general economic slowdown in the country are also taking their toll.     

'We're planning for another tough year in 2014,' said John Watkins, chief executive of industry heavyweight ASC Fine Wines and speaking to Decanter.com in Shanghai ahead of the first ProWine trade expo in the city. ProWine is the sister show of Prowein, held annually in Germany, and organisers have signed up 570 exhibitors from 30 countries for the debut expo in China, to run for three days from today (13 November). 

'There are a lot of stocks,' said Alberto Fernandez, managing partner at Torres and who has been running the Spanish firm's China business since 2000. 'The market is in a period of correction,' he said, adding that he agrees next year will probably remain difficult. 

He told Decanter.com that there could be some consolidation on the market, because some companies' profits are being squeezed by weaker demand and ongoing rises in government charges, including those for social security.

However, for those able to ride the storm, there is a sense that China's wine market could be moving to a more sustainable footing for the longer-term.

Sales of wines priced between the equivalent of US$20 to $60-a-bottle are picking up, according to Watkins. Based on normal market dynamics, Watkins said that this mid-level is 'exactly where the main part of the wine market should be' in China.