Chinese import demand for wine: evidence from econometric estimations

By estimating the demand for imported wine in China, this study investigates Chinese consumer choices in terms of wines and countries of origin, as well as the competition among suppliers. The Restricted Source Differentiated Almost Ideal Demand System (RSDAIDS) model is applied. Three goods (still bottled, bulk and sparkling wines) imported from the main exporting countries (France, Italy, Australia and Chile) and from the rest of the world are analysed. The model also includes socio-economic variables and seasonality. The results show that price sensitivities are different: inelasticity for sparkling wines, elasticity for bulk wines and different degrees of responsiveness for still bottled wines. France plays the role of market leader, and competitive interdependence emerges among its followers. The estimation of import expenditure is characterised by the widening of the wine portfolio. The minor followers generate high competitive dynamism. Relationships of substitutability or complementarity between wines and sources emerge. Finally, research perspectives of wine marketing are suggested.