Chinese austerity weighs heavily on French wine exports

Weaker consumer demand in Mainland China has damaged French wines and spirits exports in the first half of 2014, with Bordeaux chateaux hit hardest.

Global French wine exports fell by 3.5% for the six months to the end of June versus the same period of 2013, to 68.2m cases. The value of exports fell more sharply, by 7% to €3.3bn (CNY25.75bn).

The headline figures hid an even worse performance for Bordeaux, which saw global exports fall by 28%.

This was particularly due to China, according to the French Federation of Wine and Spirit Exporters (FEVS), which published the figures.

Christophe Navarre, FEVS president, blamed the Chinese government's 'anti-extravagance policies', which have included curbs on officials' entertainment budgets.

China-based importers bought fewer cases of wine in order to drain stocks already in their warehouses, the FEVS said. Its report is consistent with comments previously given to DecanterChina.com by several key importers.

Other French regions have not been hit as badly as Bordeaux so far this year. In Burgundy, regional trade body BIVB reported that wine exports to China fell by 7% in volume for the first seven months of the year, but rose by 14% in value.

The BIVB stressed that China remains a 'relatively small export market' for Burgundy. It is the region's 11th biggest export market, according to the latest figures.

'We did not invest so much in China as Bordeaux did,' said Pierre Gernelle, director of the Federation for negociants-growers in Burgundy, or FNEB.

Gernelle added that Burgundy makes '70% white wine', which has so far been of less interest to Chinese importers.

Many importers remain optimistic for China's long-term prospects and believe the country's wine market is in a transition phase, as consumption moves from government officials to regular consumers.

(Extra reporting by Panos Kakaviatos)