Liquor industry drinks to better times

Pandemic forces switch in sales tactics

Lu Jiang, 45, has noticed that friends, long accustomed to drinking wine at business dinners, have developed a new habit: sampling it at home.

The wine specialist, based in Beijing, said: "One friend drinks a bottle of wine with his wife at home every couple of days. Another told me that he now has a closer relationship with his father because they have a chat over a glass of wine each night."

The coronavirus pandemic has fundamentally changed many aspects of liquor consumption in China, having created a new environment for drinking and shifted sales from offline to online.

In the year's first half, China imported and produced less liquor than during the same period last year, but the country's producers and distributors expect sales to rebound in the second six months.

Lu said there have been many changes because alcohol, which used to be drunk mainly at restaurants, has been consumed more often at home in the past six months.

"At business dinners, big brands are preferred, but when drinking at home, people opt for wine that is a good value," he said.

Since the onset of the pandemic, the red wine Caperucita Tinta has been one of the most popular in China, selling for 88 yuan ($12.60) a bottle in many places. Produced in the Spanish city of Valencia, it is known in Chinese as Xiao Hong Mao－a reference to the red hoodie on the label.

Luan Dawei, 47, general manager of wine sales company Jiashijiu, which has been importing Caperucita Tinta for five years, said 3 million bottles have been sold in China so far this year.

He believes a key reason for the wine's popularity is that it is "light-bodied and juicy", making it easy to drink. The distinctive label is also a standout feature.

Luan's team has placed the wine in more than 100,000 stores across China, and it has also appeared in films. He expects 10 million bottles of Caperucita Tinta be sold in the country this year.

"With its attractive label and a story to tell, this wine sells well on the internet, because the pandemic has stopped face-to-face recommendation in restaurants and stores," he said.

"There have been fewer shipments from Europe to China since the pandemic started. Transportation time has lengthened and costs have risen," he said.

"With wineries in Spain experiencing financial problems due to the outbreak, we pay for the wine in advance to help them."

According to the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-products, in the first five months of this year, the country imported 478 billion liters of liquor, a year-on-year fall of about 30 percent.

Jiao Guoqiang, general manager of COFCO W&W International Co, said both the value and volume of liquor imports fell last year in China, and the pandemic has accelerated this decline.

"In the first five months of this year, wine sales fell by about 30 percent year-on-year, and my company has seen a decline of 10 percent compared with last year," Jiao said.

Han Liwen, a beverage purchasing specialist at Freshippo, Alibaba's online-to-offline grocery chain, said sales of liquor priced at 200 yuan to 400 yuan a bottle have risen significantly since the outbreak started, in contrast to an overall market decline.

Due to the pandemic, customers are making more-rational decisions when buying alcohol and are choosing it for different occasions, Han said. For a family gathering, brand and quality are key.

"In March, when most people were staying home, small bottles of reasonably priced alcohol were the most popular, such as Korean soju," Han added. "At the end of April, when life was returning to normal, sales of the baijiu (the fiery Chinese spirit) and beer started to rise."