China becomes world’s second-largest vineyard area

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CHINA HAS OVERTAKEN France to become the world’s second-largest vineyard area. The announcement comes as Chinese domestic demand for wine from the burgeoning middle class continues to grow.

Whilst Spain continues to lead in overall area of land devoted to vineyards with 1.02 million hectares, China has 800,000 hectares (1.9m acres). France is now the third-largest vineyard area. From 2000, when China accounted for 4% of land dedicated to vineyards, to 2014, where the figure was 11%, China has seen a significant increase in domestic demand for wine.

Although China is the second-largest vineyard area, France still remains the largest producer of wine. Chinese vineyards are also used to produce table grapes and dried fruit, and appear to be less efficient than their French counterparts in terms of overall wine production. France produced 46.7m hectolitres (mhl) of wine in 2014 (equivalent to 6.2bn bottles) while China is expected to produce 11.2mhl in 2015.

Demand for wine in China has continued to grow since the turn of the century, with 15.8mhl (2.1bn bottles) being consumed in China in 2014. China is the world’s fourth-largest consumer of red wine, and the world’s fifth-largest consumer overall. Given that domestic demand outweighs domestic supply, it is important to consider the attraction of foreign wines to Chinese consumers – China is now the sixth-largest wine importer in the world.

France still remains the largest seller of wine in the world with annual sales of US$8.5bn, and the US remains the largest consumer of wine, consuming 30.7mhl, almost double the amount of wine consumed in China. The level of growth experienced in the Chinese wine market, however, in terms of both demand and supply is significant, especially when considering that global consumption fell by approximately 1% in 2014. Whilst consumption in China has increased in terms of volume, this is not necessarily reflected in revenue.

As Chinese vineyards mature and become more efficient, it appears that Chinese wine production and consumption have not yet peaked. The growth in China’s vineyard area is just one indication of this.

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