Wine market lacking cheer amid global economic uncertainty
Industry experts Vinexpo and IWSR expect growth in Asia Pacific’s wine market to slow to 2.8 per cent between 2015 and 2019. This is a significant fall from the more than 18 per cent growth it logged in 2010 to 2014.
- Posted 09 Mar 2016 19:52
- Updated 09 Mar 2016 20:00
SINGAPORE: Amid global economic uncertainty, the wine market is also feeling the pinch, with those in the industry saying that they expect growth to slow over the next few years.
Industry experts Vinexpo and International Wine and Spirits Research (IWSR) expect growth in Asia Pacific’s wine market to slow to 2.8 per cent between 2015 and 2019. That’s a significant fall from the 18.4 per cent growth it logged in 2010 to 2014.
However, individual consumption remains low. Vinexpo and IWSR expect the growth between 2014 and 2019 to be strongest in India, the Philippines, South Korea and Vietnam.
“It looks like a slowdown of the other markets at the moment, but the Asian market is basically very promising for the future” said Mr Guillaume Deglise, CEO of Vinexpo on Tuesday (Mar 8) during one of their roadshows in Singapore, ahead of their wine and spirits expo in Hong Kong in May.
“Of course we have Asia as the main market – it’s the leading market in terms of volume - but also the other markets of Southeast Asia are doing very well, so we expect some growth for the few years to come,” he added.
Asian powerhouse China is largest the world’s largest spirits market, but consumption dipped last year amid an economic slowdown and a crackdown on corruption.
“One third of the spirits consumed in the world is ‘baijiu’ (China’s rice wine), because of China,” said Mr Deglise. “The baijiu nowadays is mainly consumed by people in the Tier 3 or Tier 4 cities in China, whereas in Shanghai or Beijing, it is mainly the young people drinking the imported spirits.”
China is also pushing for more locally produced wine.
“Wine has less alcohol content than baijiu, so it is supposed to be better for health, and this is what the government wants to say to the Chinese people,” added Mr Deglise. “The second reason is that the government wants China to play a very important role in wine production, in the world.”
According to Vinexpo and IWSR’s findings, the Chinese still prefer French wine, accounting for 42 per cent of consumption in the region. Champagne seems to be protected from Beijing’s anti-corruption crackdown, with that segment having logged strong growth in the past five years.
However, sparkling wine seems to be poised to become China’s next big thing, having increased fivefold between 2010 and 2014 to reach 1.1 million cases consumed.