A new National Australia Bank study reveals that China's growing middle class and appetite for luxury may drive it to become one of the largest consumers of premium Australian wines in the world.

China is fast becoming one of the largest consumers of wine in the world, as the growing number of affluent middle class triggers the desire for luxury products and lifestyles, a new study by National Australia Bank reveals. 

For one, China's wine import volumes from Australia has increased from 2007 to 2012 by 144 per cent, currently ranking it at number five worldwide, according to the National Australia Bank (NAB) Agribusiness Rural Commodities Wrap. The report added that the country is likely to catch up with other top consumers Germany and Italy to assume the number three spot within the next few years. The number one wine consumer in the world is France, followed by the US.

The appetite for wine in countries such as China has been a reason why in recent years the price of fine wines, such as those of the Bordeaux and Burgundy regions of France, have skyrocketed, also driving interest in wine as an investment asset class, as well as a status luxury item.

In 2013, China was the biggest market for red wine at 1.87 billion bottles, with local demand driving the growth in the sales of Australian premium wines, or those priced above A$10 per litre. In the year to March 2014, however, volume dropped by 12 per cent, partly driven by the crackdowns by the Chinese government on lavish parties involving government officials. This consequently pushed its value up by 2 per cent. 

Despite this drop, the study said that opportunities remain strong for the Chinese wine market as incomes continue to rise and the demand for premium Australia wines remains.

"China's per capita consumption of wine is still very low at less than two litres a year, suggesting there are plenty of opportunities for further growth. In 2013, China accounted for only 5% in total Australian export volumes but 13 per cent by value, a relative small share which leaves ample room for future expansion," said David Thorn, head of institutional banking for Asia and global head of consumer sectors at NAB, in a statement.