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EU winemakers eye China as possible boost for falling sales

European winemakers, the world's biggest producers, say their falling sales may get a boost from China, where consumption may rise a third by 2010.

Wine consumption will climb 35% from 564 million bottles in 2005 and sales of bottles worth more than $10 will increase 158%, according to a study released today by Vinexpo, a Bordeaux, France-based wine exhibition and promoter. The US and Italy will overtake France as the biggest wine drinkers in the world by 2010, Vinexpo estimates, adding that China became the world's No. 10 wine drinker in 2005. „All countries supplying the Chinese market are increasing the volumes they send there,” Vinexpo said today, with Australia and Chile also boosting sales by as much as 69% in the four years to 2005. China's own wine production is rising to „follow the changes in drinking habits,” the study said.

Wines from the European Union are battling both surging imports from so-called New World countries including the US, Australia and Chile as well as falling domestic consumption. Exports from the 27-nation bloc are stagnating at almost €4 billion ($5.2 billion) a year. In the five years to 2010, wine consumption in France will fall 9.3% and in Spain by 7%, Vinexpo estimates. Mirroring increases in China, the US will consume an extra 19% by 2010 and consumption will rise 8.3% in the UK, according to the study.

EU Farm Commissioner Mariann Fischer Boel wants the EU's €1.3 billion wine budget overhauled to provide more money for marketing wines. She's also pressing for the end of a system that pays producers to turn their unwanted surplus into industrial vinegar. Unless the EU can agree this year how to change wine production and rip out about 400,000 hectares (988,000 acres) of vines, or 12% of the current planted area, the bloc's surplus may reach 15% of production within four years, the European Commission estimates. By value, the US was the biggest market for wine sales at $19 billion in 2005, Vinexpo's study says. France follows at $8.9 billion and the UK with $8.5 billion in sales out of a total world market worth $91.6 billion that year. (Bloomberg)