China’s Wine Production Plummets 91% Since 2012 as Industry Struggles With High Prices and Slow Sales

China’s wine industry is facing a difficult period, despite significant improvements in quality and international recognition. Over the past decade, Chinese wineries have won awards and received high scores from global critics. The country’s producers have also improved their branding and distribution, making local wines more accessible both domestically and abroad. Some Chinese wines are now available in cities like New York, and ecommerce platforms have made it easier for consumers to buy them.

However, official statistics show a sharp decline in production. In 2012, China produced 1.38 billion liters of wine. By 2024, that number had dropped to just 118 million liters, the lowest level this century. While some experts say changes in data collection may exaggerate the decline, there is no doubt that the industry is struggling. Sales are slow, and many wineries are left with unsold stock.

Several factors are contributing to these challenges. Government crackdowns on official spending have reduced demand for expensive wines used as gifts or for entertaining. Economic uncertainty has made consumers more cautious about spending. There is also increased competition from other types of alcohol, and younger generations are drinking less wine overall, following global trends. The effects of the COVID-19 pandemic continue to linger as well.

One of the most common complaints among consumers is that Chinese wines are too expensive. In Europe, supermarket wines can cost just a few euros, and in the United States, affordable brands like Two-buck Chuck have driven large sales volumes. In contrast, many Chinese wines from regions like Ningxia are priced at $40 to $60 per bottle, making them a tough sell for most buyers.

Some industry insiders argue that certain premium Chinese wines offer good value compared to top international labels. For example, Chardonnays from Yunnan province can cost between $140 and $210 but are said to rival high-end Burgundy wines in quality. At a recent tasting event in Hong Kong organized by James Suckling, Chinese wines were judged alongside international brands priced between $120 and $500. The results showed that top Chinese wines can compete with established names from around the world.

High prices are sometimes driven by consumer demand for luxury products used as gifts. Judy Chan, CEO of Grace Vineyard, says some clients have encouraged her to raise prices to match international standards. As a result, Grace Vineyard now offers an anniversary edition of its flagship wine for $390.

Chinese wines are appearing more frequently on restaurant menus across the country. This year’s finalists for China’s Wine List of the Year awards featured 34 wineries from nine regions, with many labels priced at $200 or more. Local wines are also becoming more common at wine bars, festivals, and events promoted by social media influencers. Mid-range brands priced between $20 and $50 are gaining traction among consumers.

Despite these developments, most Chinese consumers still find local wines too expensive. Many shoppers look for bottles under RMB100 (about $14), but imported wines from France and Spain often sell for less than $2 in China. Local producers face higher costs due to rising wages, expensive imported equipment, and the need to protect vines from harsh winters in northern regions by burying them each year—a labor-intensive process. Taxes on wine are also high because it is not classified as an agricultural product.

Some producers are working to offer more affordable options without sacrificing quality. Projects like Mulando in Ningxia and Xiaoman wines distributed by GVS have introduced entry-level bottles priced between $4 and $7. These efforts have met with some success; Xiaoman has sold over 100,000 bottles since 2022, mainly through bars and restaurants.

The market for Chinese wine is changing as consumer preferences shift away from status-driven purchases toward taste-based choices. White wine sales are increasing, and there is growing interest in natural and orange wines as well as new grape varieties and styles. However, it will take time for these trends to make up for lost sales in traditional segments.

Awareness remains a challenge for local producers. Older consumers often associate Chinese wine with poor quality from previous decades, while younger drinkers may be more open-minded but have limited disposable income. Building strong brands that offer both quality and value will be key to winning over new customers.

For now, China’s wine industry must navigate a cautious market filled with competing alcohol options and price-sensitive buyers. The path forward will require convincing consumers that local wines can deliver both quality and affordability—a task that remains difficult amid ongoing economic uncertainty.