China: Chinese drinkers spent $59.5 billion for alcohol in 2006

Drinkers in China slaked their thirsts with $59.5 billion worth of alcohol last year, favoring beer for affordability and spirits for prestige, the U.S. Foreign Agricultural Service said in a report, according to Bloomberg, August 9.

In sales value, liquor represented 43 percent of the total market, although in volume it was only 9.8 percent of alcohol consumed, it said. The most-consumed liquor is the traditional liquor `baijiu,' made from grains such as sorghum, rice and unhusked barley. It is also known as Chinese vodka.

China is the world's largest drinker of spirits by volume, consuming more than 3.6 billion liters yearly, it added. Drinking habits would change with greater economic wealth and rising incomes, it said. China this decade became the world's fourth-largest economy and the fastest-expanding major economy.

“With greater affluence and health and awareness, Chinese are increasingly interested in drinking better rather than drinking more,'' the report said. “The market is ripe for healthier spirits alternatives to baijiu.''

China represents 20 percent of global alcohol consumption by volume, and 8 percent by sales, the agency said.

Foreign brands accounted for 10 percent of China's total spirits market in 2006, with Scottish whisky valued at $94.8 million and French grape brandy, including cognac, valued at $233 million, it said.

With changing tastes and urbanization, ``the beneficiaries have been red wines and to a lesser extent, traditional rice wines, light beers and non-alcoholic drinks,'' the report said. ``Chinese herbal spirits have benefited too.''

The Foreign Agricultural Service is a unit of the U.S. Department of Agriculture that tracks consumption habits and supply patterns in overseas markets. China and Hong Kong are the largest Asian export markets for U.S. liquor after Japan, it said.

10 August, 2007