Fine Wines/Champagne and Spirits in China

PROSPECTS

Drinking for its simple enjoyment and experiential pleasures drive growth

Traditionally, luxury wines/champagne and spirits have been reserved for special occasions, such as Chinese New Year holidays, banquets or business dealings; however, today’s consumers tend to take a more casual approach to drinking alcoholic beverages. They are very interested in promotional offers and are unwilling to compromise on quality.

Mid-sized cities boom with a rising affluent class fuelling demand

The consumption of luxury wines/champagne and spirits is being fuelled by the boom in mid-sized cities in China. The rising affluent class in mid-sized cities are willing to spend to meet their growing appetite for luxury wines/champagne and spirits.

New luxury wine consumption patterns among millennials

Millennial consumers are the most promising market for luxury wines, as they are more open to diverse tastes and brands than any other generation, and they care deeply about authenticity, brand history, uniqueness and production methods. They have a natural curiosity for exploring wines/champagne and spirits but with very limited wine education and knowledge.

COMPETITIVE LANDSCAPE

Other luxury spirits continues to post the fastest growth, powered by high-end baijiu (Chinese liquor)

The Chinese have an affinity for drinking extremely strong white liquor; the strength of baijiu can reach an ABV of 65%, it is categorised in terms of aroma, widely consumed in China and always a staple at family reunions, business dealings, weddings and formal dinners. Kweichow Moutai is the leading brand of baijiu in China.

Luxury wines/champagne and spirits is braced for the impact of the US-China trade war

American whiskey has become the latest victim of the US-China trade war, with China announcing an additional list of 106 products to be hit with a punitive 25% tariff in April 2018, including whiskey and cigars. The total tax levied on US wine has risen to 68%.

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