The squeeze on prices could not be better news for more affordable New World wines, with countries such as Chile and South Africa already taking more market share with wines under 100 yuan.

"There is still demand for imported wine, but not the same wines," said Guillaume Deglise, CEO of Vinexpo, which organises wine fairs to help introduce producers to China buyers.

"Before it was mostly the luxury end of the business－up-market wines from Bordeaux. Now it's the entry-level market."

Import volumes have started to pick up in 2015, but average price are still falling as consumers tighten their belts.

In response, Australia's Treasury Wine Estates Ltd has lowered prices and trimmed inventories, helping revive profits in the market.

"We now track our inventory by partner and by customer monthly, so we know if their inventory is too high," Robert Foye, Treasury Wine's managing director for Asia and other regions says. The firm owns brands such as Penfolds, Lindeman's and Wolf Blass.

With the world's largest middle-class, he says China would become an increasingly key market for the firm, even though the culture of wine drinking is still relatively new.

"Normally I drink beer or baijiu, it's very rare that I'd have a glass of wine," says Xu Fengqi, 50, who lives in the northeastern port city of Dalian. Friends sometimes gave him wine as a gift, he adds, but he rarely bought it himself.

"Even then, we often find we haven't actually got a bottle opener, and one time when I tried to open the bottle I pushed too hard and the cork ended up floating in the wine."

There is still demand for imported wine, but not the same wines. ... Now it's the entry-level market."