China's Anti-Bling Push Hits French Wine Exports
Date£º
2014-09-10 14:10 Source£º
winesearcher Author:
AFP Translator:
A move away from extravagance in China has played havoc with French wine exports.
The "anti-bling" policies and the anti-corruption measures of the Chinese authorities are taking a toll on French wine and spirits, with exports down more than 7 percent in the first half of the year.
China has risen to become the fifth-largest foreign market for French wine and spirits in less than 10 years, especially for top-end products, but that abruptly changed in the first six months of 2014: sales fell 9 percent in volume but 28 percent in value, according to the Federation of Exporters of Wines and Spirits of France (CFTS).
"This is clearly the fight against extravagance announced in early 2013, which impacted the products with higher added value and the older Cognacs and wines of Bordeaux," the Federation¡¯s deputy director-general Pierre Genest said. "China's decision penalized us even more, as it was unexpected and it targeted the best-value products.¡±
In the first quarter of 2014, exports of wines and spirits reached 4.8 billion euros ($6.2bn), down 7.3 percent from 2013. Spirits alone totaled $1.5bn, with Cognac down by 12 percent in value.
Wine exports fell more moderately in volume with 68.2 million cases shipped, but represented a 7 percent loss in value. Champagne bucked the trend and continued to grow (up 6 percent in volume), but Burgundy saw a 28 percent decline.
Good sales in northern Europe did not compensate for the Chinese casualties that have already heavily affected the books of large drinks groups such as R¨¦my Cointreau, which saw its profits halved last year.
The Chinese market saw exceptional growth between 2009 and 2014, rising 168 percent, Genest said. The challenge in the next few years, he believed, would be to produce wine at competitive prices to meet the competition from the New World, Italy and Spain.
"The Chinese market is a big cake that attracts many producers from around the world. French wines have a good image, but it is not enough if the quality or the price is not there. The image is important and sometimes necessary, but not enough on its own. "
In 2013, the French exported 200m cases of wines and spirits (mostly Cognac, Champagne and Burgundy), raising more than $14bn.
Small harvests in 2012 and 2013 saw France slip behind Italy and Spain in terms of production size. Prices rose accordingly, with France selling 10 percent less volume and 30 percent more in value between 2010 and 2013.
Fortunately, the coming harvest looks much better for 2014, if the weather holds.