Chinese lose taste for French wine amid cooling economy

The Federation for Wine and Spirit Exporters said that direct sales to mainland China slumped 14.4 per cent in 2018 to €1 billion (S$1.5 billion).
The Federation for Wine and Spirit Exporters said that direct sales to mainland China slumped 14.4 per cent in 2018 to €1 billion (S$1.5 billion).PHOTO: AFP

PARIS • Sales of French wine and spirits to China fell last year, industry figures showed, in a further sign that a Chinese economic slowdown is hitting consumption.

The Federation for Wine and Spirit Exporters (FEVS) said on Wednesday that direct sales to mainland China, France's third-biggest export market, slumped 14.4 per cent in 2018 to €1 billion (S$1.5 billion).

But it said the drastic decline had been partly compensated by an increase in exports to Singapore and Hong Kong, from where some French wine is re-routed to the mainland.

Sales to all three Asian markets shrank by 1.5 per cent last year to €2.5 billion, a reversal after years of double-digit growth fuelled by the growing taste for foreign alcohol, particularly high-end reds from Bordeaux.

China's economy grew at its slowest pace in almost three decades in 2018 and lost more steam in the last quarter of the year as the Beijing government battled to cut massive debt and quell a US trade war.

FEVS head Antoine Leccia, however, put a positive spin on the figures, saying exports to mainland China, Hong Kong and Singapore were still the second-best on record, "which confirms the long-term dynamics of the Chinese market".

French wine makers have experienced only one other major blip in China over the past 15 years of explosive growth.

 
 

In 2013 and 2014, an anti-corruption drive by the Chinese Communist Party coincided with a fall in demand for luxury goods, with wine sales declining as a result.

"The only producer country which saw its exports (to China) increase last year was Chile because there are no import duties since 2016 thanks to a free-trade agreement," Mr Leccia added.

Italian and Spanish producers were also hit by the downturn, he said.

Worldwide, French wine and spirits exports grew 2.4 per cent last year to €13.2 billion, driven by appetite for the country's three most famous products: Champagne, Bordeaux wine and Cognac.

The largest export market remains the United States, where sales increased 4.6 per cent.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on February 15, 2019, with the headline 'Chinese lose taste for French wine amid cooling economy'. Subscribe