A customer shops for bottled wine imported from Australia in Nantong, East China's Jiangsu Province. (Photo: IC)

France, China's biggest source of imported wines, witnessed a stumble of 21 percent in exports to China in 2018, while imports from Australia and Chile quickly increased, according to a report by the China Association for Imports and Exports of Wine and Spirits (CAWS).

The gains of Australia and Chile were largely due to favorable tax policies and shifts in Chinese consumer habits, industry insiders said. 

According to the report, wine imports from France fell 21 percent to 174 million liters in 2018, and the value tumbled 3.08 percent to 7.1 billion yuan ($1.05 billion), taking up 39.7 percent of the Chinese market. 

Australia, which is China's second-biggest source of imported wine, saw wine exports to China rise 11.83 percent to 119 million liters, increasing its market share to 27.1 percent. Imports from Chile, which ranked third, were up 0.01 percent  to 74.7 million liters. 

Yang Peng, a representative from the Shanghai International Wine and Spirits Exhibition,said that this year wines from the so-called New World, namely regions outside the traditional sources in Europe and the Middle East, took up half of the exhibition. 

Yang said the increase in wine imports from Australia and Chile mainly reflects the zero-tariff policy that Australian imports enjoy in China, which means more profit for dealers. "It allows for a price advantage so dealers are more inclined to import wines from places like Australia." 

The tariff on wines from Australia began to decrease after the signing of the China-Australia Free Trade Agreement in 2015, and it fell to zero this year. French wines still face a 14 percent import tax.

The rise of New World wines in China could also be attributed to similar consumption habits and market factors in China as in the source nations, Li Ruyi, a PhD holder in wine science and business at the University of Adelaide, Australia, told the Global Times.

"Unlike the Old World in Europe, wine appreciation is much more laid back in Australia," Li said. "Just like most customers in China; Australians tend to treat wine more as a beverage to serve with meals rather than a symbol of culture, sophistication and class."

French brands also tend to be fragmented while Chilean and Australian brands are less diversified but each brand is backed by larger volume, Shen Xiangyun, a wine retailer based in East China's Zhejiang Province, told the Global Times. 

"There is still huge potential in the Chinese wine market," Li said. "People are willing to drink wine for its taste and potential health benefits, but overly complicated classification and fragmented wine brands can make the choice of a French wine a daunting task for customers in China who are relatively new to wine consumption."