In China, a fight for morality has begun, as a result, we can buy excellent wine cheaper

Waiters serve tea to Xi Jinping (center) and other Chinese officials during a parliamentary session in Beijing. March 12, 2019. Photo: Kevin Frayer / Getty Images

The Wall Street Journal reports on the details.

The story of China's unexpected rise as a key market for global winemaking began in the mid-2000s. In a short time, the country transformed into a powerful engine for the industry, increasing its share of global imports from less than 1% to 8% by 2017.

During this period, which publicists called the second "red revolution," producers from Chile, Australia, California, and France reaped colossal profits. One of China's most famous basketball players, Yao Ming, began bottling wine in California's Napa Valley, while wealthy Chinese buyers acquired around 100 wineries in French Bordeaux.

Consumption peaked in 2018, when China imported nearly $3 billion worth of foreign wine. In 2019, a quarter of Bordeaux's wine exports went to China.

However, the market soon faced a series of severe challenges. First, the COVID-19 pandemic significantly reduced opportunities for banquets, and then a massive collapse in real estate prices in China made wealthy citizens feel poorer and abandon luxury goods. Rich Chinese owners began divesting their French estates.

Geopolitical confrontation was added to the economic problems. In 2020, China imposed high tariffs on Australian wine, which was a strong blow to the famous Australian brand Penfolds (known in China as "Ben Fu," meaning "striving for prosperity"), owned by one of the largest wine corporations — Treasury Wine Estates. Although the tariffs were lifted in 2024 and Penfolds tried to regain its position by sending large consignments of goods to the country, the market situation had already irreversibly changed.

The Final Blow

The final blow to trade was dealt by leader Xi Jinping's campaign for "moral purity" and strict austerity. In May 2025, Beijing officially banned alcohol consumption at government and Communist Party events. China's anti-corruption body began prosecuting officials who combined banquets with state affairs.

Павялічыць

Waitresses serve tea before the opening of the 19th Congress of the Communist Party of China. October 18, 2017. Photo: Qilai Shen / Bloomberg via Getty Images

The case in Henan province caused a stir, where a local official died after a lunch banquet, leading to the punishment of 9 of his colleagues. As a result, the fear of violating rules became so strong that even state-owned alcohol companies stopped serving alcohol at their conferences.

An additional factor was the change in consumer habits within China itself. Wine lost its "aura" as a fashionable drink. Young consumers associate it with tedious work meetings and find its taste unpleasant.

These political and social changes led to an additional 11% reduction in wine imports to China last year, reaching half the level of 2018. For winemakers worldwide, who relied on China while consumers in other regions, including Europe, started drinking less, this became a real disaster.

In November, the regional wine association Riverland Wine in Southern Australia sent an "Urgent Open Letter" to the state government, stating that the price of Shiraz grapes in the region had fallen by more than two-thirds since serious problems began in the Chinese market in 2020. Prices are expected to be even lower this year.

Among the most affected regions is Bordeaux. First, Chinese owners began divesting their estates in the region, and last year, exports from it to China decreased by 28%. Since 2023, approximately 20% of Bordeaux's vineyards have been uprooted.

Павялічыць

Advertisement for Penfolds wine, produced by Treasury Wine Estates Ltd. Shanghai, China, February 19, 2026. Photo: Qilai Shen / Bloomberg via Getty Images

Wine corporation Treasury Wine Estates announced in December 2025 that it had $150 million worth of surplus wine remaining in warehouses in China and declared a reduction in supplies. European giants Pernod Ricard and Diageo are also reporting double-digit sales declines.

The crisis has hit small producers particularly hard. According to Tim McMullen, owner of Australian winery Borambola Wines, he received 40% of his profit from China in 2019, but has not recorded a single sale there in the past year. He is now forced to leave 30% of his harvest to rot on the vines and personally perform arduous physical labor to at least somewhat reduce costs.

Some other producers are selling excellent quality wines cheaper than before.

• 1
• 0
• 0
• 0
• 1
• 0
• 0
• 0