China Takes to Boozing With a Vengeance
GlobalData study says per capita consumption to rise to 14.4 liters by 2021
While western teenagers and young adults are forswearing alcohol at an increasing pace, the Chinese are taking to drinking with gusto, according to a new report by GlobalData, a London-based digital media company. The rise of a drinking culture is expected to drive the Chinese spirits market with an average compounded rise of 15 percent through 2021 annually, GlobalData said.
In both the United States and the United Kingdom, drinking, smoking and even drug use have fallen markedly and appear to be headed downward more. The Washington Post reported on Sept. 20 that between 1976 and 1979, 93 percent of high school seniors had tried alcohol. By 2016, that had dropped to 67 percent, a still-substantial figure that is nonetheless on a downtrend. In the UK, 62 percent of 11-to-15-year olds had drunk alcohol in the mid-1980s. That has fallen to 38 percent today according to a study reported on Vice.com.
By contrast, “China’s younger consumer base that drinks on social occasions and the country’s increasing number of female drinkers will play a key role in the years to come for the Chinese spirits market,” according to the GlobalMedia study. “Per capita spirits consumption in the country was pegged at 7.3 liters in 2016, nearly a full liter over the global average of 6.4 liters and 6.2 liters in the Asia-Pacific region. China’s per capita spirits consumption is set to rise to 14.4 liters by 2021.”
The OECD per capita average is about 8.7 liters. Chinese consumption in 2-13 was below 6 liters. If consumption hits 14.4 by 2021, that will put the country among the OECD’s highest, currently led by Lithuania at 14.2 liters per capita.
The rise in Chinese youth alcohol use is partly driven by fast increasing affluence and changing social mores although according to a 2015 study by the Journal of Food and Drug Analysis, archeological discoveries show that the Chinese have been making booze for 8,000 years.
“As early as 5000 BC, Chinese ancient people had acquired the relevant knowledge of brewing along with drinking etiquette,” the study pointed out. “Over the years, grain has been the main raw material for alcohol production, which presents a threat to the country’s food security. Alcohol still plays a very important role in the development of agriculture in China and in other social occasions such as worship, funerals, marriages, and festivals and in the daily lives of Chinese people.”
That long association with alcohol doesn’t mean China has learned to live with booze any better than any other country. Beginning in the late 1980s, the Chinese alcohol industry began to develop rapidly, “giving rise to a sharp uptick in alcohol-related problems such as alcoholism, alcohol intoxication, and increased road accidents due to drink-driving, which aroused the concern of researchers,” according to the Journal study. “Violence, crime, economics, and family are among the numerous short-term alcohol consumption related consequences, but physical, mental, public health, and social are the most pronounced long-term consequences, yet the Chinese government does not have any outstanding programs and plans in place to counteract alcohol consumption and its associated problems,” according to the Journal of Food and Drug Analysis.
GlobalData analyst Ryan Whittaker pointed out in a prepared release that China’s gross domestic product has increased at a rate of around 7–8 percent over the past few years after rates over 10 percent, increasing disposable income, particularly in more cosmopolitan urban areas.
That has alarmed Chinese authorities, who in a 2015 survey found that adolescents as young as 12 frequently drink alcohol despite passage of a 2006 law limiting alcohol for minors. A study by the National Institute for Nutrition and Health surveyed 30,605 junior and senior high school students between the ages of 12 and 20 in Beijing, Shanghai, Guangzhou, Shandong Province, Chengdu and Harbin over a two-year period and discovered that 51 percent of teens have tried alcohol, while 15 percent have admitted to being drunk. Of those who said they consume booze regularly, almost two-thirds said they often drink at parties, while about half said they often drink at family dinners. Another survey found that 25 percent of respondents admitted to trying alcohol under the age of 10.
According to GlobalData, locally produced and China-specific specialty spirits are Chinese drinkers’ favorite category compared to other sprit types, accounting for 94.2 percent and 98.2 percent by value and volume respectively in 2016. The category, worth $193.3 billion in 2016, is set to grow further at 15.1 percent per year, dominating the overall spirits market to 2021. Brandy was second in the market with a 3.9 percent value share and a 0.9 percent volume share, followed by whiskey, vodka, gin and genever, tequila and mescal, liqueurs and rum. Six of every 10 spirits consumers are male, with those with college educations accounting 75.6 percent of the total, followed by 17.3 percent with post-secondary education. In terms of geography, Urban drinkers account for 97.5 percent of consumption.
Beijing Red Star Co. Ltd, Niu Lan Shan Distillery and Jiangsu Yanghe Group Co, Ltd are the market leaders in the Spirits sector of China, according to the report.