(Yicai Global) Jan. 31 -- After years of weak demand, the indications are that China’s wine market is picking up, according to industry insiders.

“Wine sales recovered during the lunar new year holiday this year, with a relatively high year-on-year increase,” the manager of Cofco Wine and Wine International told Yicai Global.

The Chinese New Year holiday, also known as the Spring Festival, is traditionally the peak season for alcohol sales. This year, the public holiday in China fell between Jan. 21 and 27.

China’s wine imports sank 21 percent to 340 million liters last year from 2021, with the value falling 12.5 percent to CNY9.6 billion (USD1.4 billion), the lowest in recent years and about half of 2017’s peak of CNY17.8 billion (USD2.6 billion), according to data from China’s customs agency. Domestic wine-making also contracted, as China produced only 180 million liters in 2022, down 32 percent from the year before.

“Sales in the wine market during the Spring Festival holiday rebounded quite well,” said Li Zhiwei, a Beijing-based importer of wines. Meanwhile, his business volume narrowed 60 percent in the comparable period last year from 2019, Li added.

Compared with the past two years, the peak season was clear this Chinese New Year, said Feng Yingzun, the owner of Château Leirenshou, a wine producer based in Ningxia Hui Autonomous Region. But resellers hesitated to build up stocks, as the market had just started recovering and demand had not yet returned to pre-pandemic levels, Feng noted.

The wine industry has entered the “bottoming out” stage, so the market situation will likely improve in the upcoming months, the manager of Cofco Wine and Wine International noted.

Sales began recovering at the end of last year, according to most of the wine dealers interviewed by Yicai Global, and the industry is relatively optimistic about this year’s prospects.

But as further observation is still needed to understand to what extent the market will rebound, Yang Zhengjian, dean of WBO Wine Business School, said he is still cautious about the sector’s prospects.

Vying for popularity with the traditional Chinese liquor baijiu, first-half wine sales will probably be about the same as in the first six months of 2022, Yang pointed out. After a boost in the peak season, the wine industry is expected to grow in the single digits in the second quarter, he added.

Editors: Tang Shihua, Futura Costaglione