China Spirits Market

Topics: Alcoholic beverage, Vodka, Scotch whisky Pages: 28 (6932 words) Published: July 6, 2009
Voluntary Report - public distribution
Date: 8/3/2007
GAIN Report Number: CH7063
China, Peoples Republic of

Product Brief

China Spirits Market


Approved by:
Maurice House
U.S. Embassy
Prepared by:
Steve Leu

Report Highlights:
China’s spirits sales were $25.1 billion in 2006, representing 43% of all alcoholic drinks consumed and making it China’s number one alcoholic beverage in current value terms. Spirits consumption revolves around baijiu, followed by whiskey and grape brandy. U.S. whiskey and bourbon exports to China grew 118% in 2006, with total sales of $5.9 million. Foreign spirits currently make up 10% of domestic spirits sales with the greatest growth potential in high-end baijiu, the burgeoning Scottish whiskey sector, and “healthier” spirits alternatives. For U.S. exporters, overcoming market barriers such as a lack of brand awareness and a lack of consumer knowledge about different spirit types are vital to competing against the emerging wine sector and popular beer market. FAS China's Agricultural Trade Offices are available to provide export assistance for U.S. spirits producers.

Includes PSD Changes: No
Includes Trade Matrix: No
Unscheduled Report
Beijing [CH1]
China’s Spirits Market: Overview
|2006 China Alcoholic Beverage Domestic Consumption |
| |By Value |By Volume |
|Spirits |43.3% |9.8% |
|Beer |40.7% |84.3% |
|Wine |16.0% |9.8% |
|(Source: Euromonitor International) |

China’s spirits sales were $25.1 billion in 2006, representing 43% of all alcoholic drinks in current value terms. It remains slightly ahead of beer as China’s number one alcoholic beverage in total sales value. Spirits consumption revolves around baijiu (a traditional Chinese liquor), followed by whiskey and grape brandy (cognac). Baijiu is estimated to make up 70%-90% of spirits sales.

Globally, China represents the largest consuming nation of spirits by volume and the third largest by current value. China accounts for 20% and 8% of global consumption by volume and value, respectively. At the same time, China ranks much lower in per capita expenditures of spirits, placing outside the top 20 by both consumption measures. Comparatively, populous India ranks 15th in per capita expenditures (value) of spirits.

China’s per capita rankings are expected to rise, as the rapid growth of the young affluent demographic, its increasing desire for “Western” tastes, and busier lifestyles are creating ever more social opportunities for wine, beer, and spirits consumption. Spirits consumption, however, remains heavily concentrated in the developed metropolitan areas of Northeast and East China.

In recent years, growing health awareness in China -- triggered by SARS, bird flu epidemics, and international food safety issues -- has also brought attention to the harmful affects of excessive spirits consumption, especially those of baijiu. The government of China (GOC) has responded by attempting to reduce consumption by increasing the taxation of local spirits and the number of government supported consumer education campaigns.

China Total Spirits Sales: 2001-2006
(Source: Euromonitor International)

Since 2003, spirits consumption by volume has had minimal growth after a 17% decline from 2001-2003. Consumption over the last five years has remained flat between 3,620-3,648 million liters annually. As Chinese consumers move towards beverages with lower alcoholic content, the beneficiaries of the stagnant growth have been light and “green” beers, red wines, and soft drinks. Overall, with greater affluence and health awareness, Chinese are increasingly interested in drinking better rather than drinking more. Alcoholic Beverage Demand in China: Bottoms Up, No Signs of Slowing

Overall consumer...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about China Spirits Market
  • Essay on Mobile Payment Market in China
  • Essay about POCT Market in China
  • Essay about E-Commerce Services Market in China
  • Carsharing Market in China 2014-2018 Essay
  • Market Analysis China Steel Industry Essay
  • Spirit Essay
  • Mobile Image Sensor Market in China 2014-2018 Essay

Become a StudyMode Member

Sign Up - It's Free