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China Grape Wine Industry Report, 2005-2006

Published: Sep/2006

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In 2005, China's total grape wine output reached 434.3 million liters, up by 25.4% over the year of 2004, profits amounted to RMB 1.256 billion, up by 58.8%, and that of the taxes paid reached RMB 1.207 billion, up by 30.2%. On the other side, the sharp increase of grape wine imports causes big pressure on domestic grape wine industry, however, as the gap between domestic manufacturers and foreign manufacturers with regard to competitiveness has shrunk, domestic grape wine industry stands it and develops quickly.

Currently, the main profits of China's grape wine manufacturers come from high-end grape wines, and medium grape wines contribute most of the sales. The profit margin of medium and low-end varieties remains around 11% for a long time, while that of the high-end varieties has reached 30%-50%. Consequently, many grape wine manufacturers enter into high-end market successively. It is forecasted that the competition in high-end market will be more intense in the future. At present, China's beverage industry is flourishing, in addition, from the perspective of grape wine production and sales, the dietary habit of Chinese people has been changing. Therefore, China's grape wine industry will be likely to maintain a good development trend in the coming several years.

Forecasted by Ministry of Commerce, domestic grape wine output will increase with a YoY growth rate of 15% before 2010, and the figure will reach about 800,000 tons by 2010. Grape wine imports will also increase constantly, with price falling sharply until equal to the price of home-made grape wines. Currently, China’s grape wine market has been monopolized by Great Wall, Changyu and Dynasty by and large. The market shares of the three giants are as high as 52%, the asset shares reached 38% of the industry, and the sales revenue even amount to 56% of the total. Each of them has their own advantageous market. In the important grape wine consumption market of South China, the market shares of them exceeded 50% in total.

Data of this report came from authoritative institutions including National Bureau of Statistics of China, State Economic and Trade Commission, General Administration of Customs, State Information Center, State Bureau of Light Industry, China Wine Association, China National Food Industry Association and China Alcoholic Drinks Industry Association etc.

This report analyzes the status quo of China's grape wine industry including supply & demand, market, import & export and grape wine consumption changes, and the future development trends in full details. It also makes an in-depth study of investment opportunities and existing problems, and presents some strategic solutions. It is helpful for grape wine manufacturers and investors to better understand the updates and the opportunities & risks of China's grape wine industry.



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