Alcoholic Drinks in China: A Market Analysis 2006

Abstract

The increased number of drinking outlets, especially bars and nightclubs, as well as restaurants, have helped to increase market penetration for all alcoholic drinks. Likewise, the spread of organised retail chains has helped to provide greater market penetration for the home consumption market.

REPORT COVERAGE

This report covers the market for alcoholic drinks in the People' s Republic of China. The report covers all alcoholic spirits (including traditional Chinese ' white' spirits, rice "yellow" wine and imported spirits):

• Spirits
• Beer
• Wine

EXECUTIVE SUMMARY

The Chinese alcoholic drinks market is both large, and (relative to other developed markets) still growing rapidly. Add to this the fact that Chinese consumers are very sophisticated, and highly brand conscious, and that the degree of sophistication is ever increasing as more brands and products are introduced.

Older people (the majority spirit drinkers in China) are drinking less traditional spirits, replacing these with beer, due to the lower alcohol levels in beer, thus reducing the health risks associated with drinking of traditional spirits. Overall per capita consumption is still comparatively low in China, which offers a large scope for market development.

Beer remains the dominant staple of the Chinese beer-drinking habit, and China now ranks as the largest beer market in the world.

Wines have attained consumer acceptance, not least due to Chinese politburo member Li Peng, who decreed that state banquets should be lubricated with wine instead of spirits in 1996. The influence of western eating and drinking habits have been key in this, as have rising average incomes in China. Indeed, wine is now becoming the fashionable drink for the wealthy younger generations in China' s cities, and the "badge" drink of China' s wealthiest élite.

Sprits remain part of Chinese tradition appearing in many social activities including birthday party, weddings and other ceremonies as well as business entertainment. Traditionally spirits are the main drink denoting happiness or respect.