World wine heavyweights still betting on China

Two of the world's largest wine companies, Constellation Brands and Treasury Wine Estates, have reaffirmed their commitment to mainland China.

Penfolds producer Treasury reported a 'significant decline' in Chinese consumer demand for premium wine towards the end of last year, but its new chief executive, Michael Clarke, sees no reason to panic.

'There's a hiccup in China, but I think it's going to come back,' he said in his first official address to journalists and industry analysts in Australia.

China's fine wine market has been damaged by curbs on government officials' entertainment budgets, but several observers believe consumption is moving to a more sustainable place, based around households and young people. Per capita wine consumption is still only 1.5 litres in China.

'I look at the wine industry and I see there's a movement upwards towards premiumisation. I see that across the world,' said Clarke. 'There are wealthy people in China, who are in the middle market and top end of the market. These are the guys who are going to buy top end wines.'

His comments come after the world's largest wine firm, Constellation Brands, said it had signed a long-term deal with distributor Vats Liquor in China to expand sales of its Robert Mondavi brand there.

'The vision of both Vats Liquor and Constellation is to make Robert Mondavi the number one imported premium wine brand in China,' said Vats Liquor chairman Wu Xiangdong.

'With the deep roots we are cultivating, we intend to shape this important market and make these wines available to more Chinese consumers,' said Jay Wright, president of Constellation's wine and spirits division.