By Andy Young

Asia, and particularly China, is projected to dominate global wine consumption and import growth this decade, according to a research from the University of Adelaide's Wine Economics Research Centre.

The research suggests that China's net wine imports could rise by up to 790 million litres by 2018, which could be good news for Australian wine producers.

Professor Kym Anderson the executive director at the centre, said: "It is the sheer size of China's adult population of 1.1 billion people, and the fact that grape wine still accounts for less than four per cent of Chinese alcohol consumption, that makes the import growth opportunity unprecedented.

"We project that China's net imports of wine could rise by between 330 and 790 million litres during 2011-2018 once the full impacts of China's recent bilateral free trade agreements with Australia, Chile and New Zealand are felt."

Although much has been made of China's recent austerity drive and the impact this has had on the country's consumption, Professor Anderson has said that wine consumption will increase among China's general population, in particular younger people, leading to the need for the country to increase its wine imports.

"While it's true there has been a blip in the growth in China's imports because of their austerity measures, our expectations looking several years forward is that, that will be eclipsed by general growth in the demand for wine by the community at large, as distinct from those who have big expense sheets or are using it for gifting," Professor Anderson told ABC Radio.

"The number of adults is now huge in China with 1.1 billion out of the 1.3 billion people are people over 15 so they are potential consumers of wine. At the moment wine is a tiny fraction of total alcohol consumption and the income itself is being spent on consumer items more than was the case in the past."

"Even if it's slow growth today the market looks like it will be growing into the future. China is not a market that you can just walk into and start selling in; it requires building relationships with your importer and distributor and so on. It's a non-trivial exercise and that could be a turn-off for small firms wishing to export small volumes. So you do need deep pockets to be able to exploit the market.

The growth area is more likely to be at the premium and super-premium end by ordinary consumers doing it for themselves not doing it for giving away as a gift or for lavish dining. So I think that will be where the growth area will be.

"It will be relatively younger consumers probably looking to expand their choices to exotic products and this is one of those exotic products that seems to be attractive to a number of them."

The research was supported with funding from the Australian Grape and Wine Authority and the "Asia's Evolving Role in Global Wine Markets" working paper can be downloaded from the Wine Education Research Centre's website.

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The Shout Team

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