During the annual meeting of the World Alcohol Beverage Alliance (WABA), the Chine Wine Industry Manufacturing Index was released to the public.  The Index highlights the current operating situation of the wine industry in China as well as recent and foreseeable shifts in the economy and industry. Also included in the report is the well-being index which is used to promote structural reform of the supply-side of the market in an attempt adapt to the consumer market in China and the world in the future.

There are three general types of this index namely antecedent type, consistent type and lagged type. The Institute for Research of WABA selected 22 indicators to analyze the operation status and trend of wine manufacturing. By principal components analysis, they determined the type of index according to the contribution rate of top two principal components.

The experts reached a conclusion by analyzing the 6 antecedent indicators including the growth of main business income, business taxes and additional, total profit, export value, interest expenditure, and the purchasing index of manufacturing manager, that the antecedent type index changes periodically and shows a recovery trend in 2016.

In addition, the consistent indicator continued to fall and the state suffered successive shakeouts, including the growth of total assets, circulating assets, operating costs, management costs, sales expense, product, financial costs, and the price index of tobacco, liquor and other consumables.

The Lagging indicator started to rebound in 2015, and it very likely to recover in 2017, including the PPI of agricultural and sideline foodstuffs processing industry, wine and refined tea industry, the retail price index of drinks and tobacco, the growth of stocks, debt, net account receivable and value added tax payable.

The WABA Institute for Research has predicted the trend of future comprehensive cycle index by means of exponential smoothing. The upper – lower limit are 80% and 95% which were presented in the WABA report.  At the same time, the researchers also predicted a fluctuation of wine manufacturing industry index with an interval width of approximately 0.18 in the next eight months. An interval width increase shows that wine manufacturing industry climate index will smooth into new normal in the next eight months.

We should choose the intensity and direction of investment, stabilize the great trend of wine manufacturing industry, and prompt emerging Chinese wine manufacturers with positive changes through in-depth analysis of the development trend of industry, the wine manufacturing industry early warning index and the actual situation.