In 2014, China's creation, importation and utilization of wine totalled 1.16 billion liters, 383 million liters and 1.58 billion liters, respectively. It is assessed that the interest for wine in China will increment by 10% every year in the coming years. Market penetration will spread from costal front ranges to inland territories.
The business channel of wine varies from eateries, bars, general stores, speciality stores, group purchasing and e-trade platforms.
Market Growth Drivers
A key development driver in the Chinese economy has been the fast rise in normal family unit livelihoods. Over the previous ten years, China has encountered an average GDP development of around 10%, which has made another center salary bunch with much higher disposable earnings. Moreover, Chinese urban populaces have expanded by an expected 153 million in the course of recent years (2005-2015); by 2025, it is expected that urban regions will develop from 607 million to 822 million people.4 China's significant urban communities – Beijing and Shanghai – will keep on being driving customer center points. Past Beijing and Shanghai, McKinsey predicts that by 2015, nine huge Chinese markets will represent 30% of extravagance utilization in China: Chongqing, Dongguan, Foshan, Guangzhou, Hangzhou, Nanjing, Shenzhen, Tianjin and Wenzhou.5 Luxury utilization will unmistakably incorporate luxury F&B items, as well as consumer goods.
In the meantime, fast advancements in transportation (counting significant rail changes and street supply routes) are extending the financial capability of second-and third-tier cities. As far as F&B, infrastructure upgrades are accelerating dissemination times, proficiency and expenses, accordingly fortifying neighbourhood economies by raising consumer demand for higher quality items.
Due to China’s rapid urbanization, the number of urban residents is expected to reach one billion by 2030. Urban residents’ steady consumption growth of basic ingredients over the last 20 years reflects the rising proportion of income spent on food and eating out.
Because of China's quick urbanization, the quantity of urban inhabitants is relied upon to achieve one billion by 2030. Urban inhabitants' consistent utilization development of essential fixings in the course of the most recent 20 years mirrors the rising extent of wage spent on nourishment and eating out.
Import and distribution channels are unpredictable and change often. Import methodology must be taken care of by authorized shippers who now and then go about as wholesalers too. Hong Kong brokers offer minimal risk as merchants and distributors; they can arrange payments in foreign monetary forms and have a wide distribution system. Chinese merchants can be hesitant to open credit extensions and now and again do not have an exhaustive comprehension of international exchanging practices.
When entering the market in China, there are high entry cost both regarding expenses included in obligatory certification and the assets required. Item enrolment, labelling and item expiry dates are especially high concern around there. To enter the Chinese retail showcase, food items must get a hygiene testament from the local government where the item will be sold. Irregularities in the understanding of regulations among authorities at various section areas and whether they freely or all the more extremely apply fines/punishments are likewise issues. Regulations change with some recurrence and all of a sudden. Changing and obliging these regulations can be tedious and costly.
Food Labelling
To comply with China’s food labelling regulations, all imported foods and beverages have to show a white label attached to individual bottles, cans or packets in simplified Chinese, as used in Mainland China. Labels must be approved by the Chinese Inspection and Quarantine Service (CIQS). The regulation requests that products are labelled before shipping, but as this can be difficult to carry out, CIQS allows labelling to take place in bonded warehouses in China.
To conform to China's food naming regulations, every single imported foods and beverage need to demonstrate a white mark connected to individual containers, jars or parcels in disentangled Chinese, as utilized as a part of Mainland China. Marks must be endorsed by the Chinese Inspection and Quarantine Service (CIQS). The regulation demands that items are marked before delivery, however as this can be hard to do, CIQS permits naming to occur in reinforced distribution centers in China.
Pricing
The wine market in China is to a great degree divided with more than 500 little wine makers. Driving wine makers incorporate Great Wall, Changyu, Tonghua and Dynasty. Together they make up around 60% of the wine market. Changyu is at present the pioneer in the still grape wine market. It is the greatest wine maker and spotlights on offering premium wine items.
The assessments included in import to China incorporate import obligations, esteem included duty (VAT), and conceivably utilization charge (CT) if the item being transported in falls under CT indicated classes. For outside exchanging organizations occupied with the matter of offering (or import) to China, it is savvy to be completely clear about the significant assessment issues before hurrying into marking any business contracts, on the grounds that the measure of import duties and who might be at last at risk for those charges to a great extent relies on upon how the business contract is finished up between the remote merchant and the Chinese purchaser.
Global Commercial Terms (Inco terms) distributed by the International Chamber of Commerce (ICC) are broadly utilized as a part of global business exchanges to convey the expenses and hazard bearing connected with the transportation and conveyance of products. "CIF" (Cost, Insurance, and Freight) and "Coxcomb" (Free On Board) are presumably the most widely recognized value terms that have been received by universal exchanging organizations when marking an agreement. "CIF" infers that the vender would be in charge of the cargo and protection to convey the products to the port of destination; the purchaser pays for the cargo and protection if a "Coxcomb" valuing is settled upon.
The measure of import assessments and traditions obligation payable is figured in view of the cost or estimation of the foreign products. This quality is known as the Duty Paying Value (DPV) which is resolved in view of the executed cost of the merchandise. It incorporates transportation-related costs and protection premiums on the products before emptying at the port of entry in China. Expenses, for example, VAT or CT are excluded in the determination of the DPV.
The Composite Assessable Price (CAP), which is another critical term for the subject, is the aggregate of DPV, import obligation, and CT if appropriate.
The following is the means by which the methods of reasoning are appeared in formulae:
DPV = Cost of goods + Transportation cost + Cargo insurance
Import duty = DPV * Tariff rate
CAP = DPV + Import duty = DPV * (1+tariff rate)
VAT = CAP * VAT rate

The average price of 1 litre bottle of wine in china is 16 CAD. The client is providing more than a litre in a 10 CAD in Canada, which may after including all the tariffs and logistics cost comes up to less than 15 CAD , which is competitive enough to sell the cans of wine in Chinese market. The price of Local Wine in China is around 2.50 $ to 5.00 $ and mid to high range bottle will of be 12$. Prices must be kept as low to attract Chinese consumers as they are highly sensitive to product cost.
The method of Calculation of price for alcohol and wine in china can be done by simple method.
Calculation = FOB Price and add 50% [50% includes 14% import Duty, 17% VAT, 10% Consumption Tariff.]
FOB (Freight on Board) is incoterm that is most logistically efficient for current situation.
At this point to keep the wine competitive in current market with regards to the size of bottled can being 350 ml. Entire set of 4 should not be of more than 12$ and each bottle in itself should be worth 3$ at maximum. Price could face fluctuation depending on the whether cost of moving wine in bulk was cheaper or not.
The Minimum that company could find affordable with all tariff and transportation cost included is 2.50$ per bottle and 10 $ for a set.