Beverages News
- Rising wine consumption lifts Changyu profit
Date: 20-Mar-2007 Sources: (Shenzhen Daily)
YANTAI Changyu Pioneer Wine Co., China's biggest wine producer, said 2006 profit rose by 42 percent as rising incomes boosted consumption of grape wine in the country.
Net income rose to 446.8 million yuan (US$57.8 million), or 0.85 yuan a share, from 313.3 million yuan, or 0.77 yuan per share, a year earlier, the Shenzhen-listed company said in a statement, citing international accounting standards. Sales grew to 2 billion yuan from 1.69 billion yuan over the same period.
Grape wine, first introduced to China after the nation started economic reforms in 1979, is becoming increasingly popular in wealthier coastal provinces, competing for market share with beer, Chinese spirits and rice wine. Grape wine sales jumped 25 percent in 2006 to 12.95 billion yuan, according to government figures.
China's grape wine consumption will grow 12 percent a year to 1 million kiloliters in 2014, according to BOC International Holdings Ltd. Per capita consumption is China is 0.3 liters, compared with 12 liters in the United States, 59 in France and the world average of 4.
Changyu is putting greater focus on premium products to improve margins. It competes with domestic rivals Dynasty Fine Wines Group Ltd. and China Great Wall Wine Co. in an industry crowded with 400 companies. The three companies control about half of China's wine market.
Changyu's gross margin, or the percentage of sales left after production costs, rose to 63.4 percent in 2006 from 63 percent in 2005.
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