Food & Beverage

After Brexit, this market could overtake the UK as world's second-largest wine importer

China's growing wine market

China will be the world's second-largest wine import market, overtaking the U.K. by 2020, the CEO of international wine trade exhibitor Vinexpo, Guillaume Deglise, told "Squawk Box" on Tuesday.

"Wine is getting very trendy [in China]. There's a lot of actual consumption by the middle class in China, which is exactly what changed the market tremendously over the last two or three years," Deglise said. China is currently the world's fifth-largest in terms of consumption.

"Imports are booming in mainland China, as opposed to local wine which is slightly declining," Deglise said.

Demand for imported wine is set to grow by an average of 7 percent every year over the next four years. He added that locally produced wine is still a niche market and Chinese investors are realizing that making wine is difficult.

Vinexpo's research comes as Brexit fears loom large over the U.K., which is currently the second-largest wine importer.

Britain currently imports 2.8 billion pounds ($3.52 billion) in imported goods and exports 440 million pounds ($553 million), making it a crucial trading hub for wine, according to the U.K.'s Wine and Spirit Trade Association.

WSTA warned that European Union customs and duty laws would weigh on wine prices. New restrictions would also lead to delays at ports, meaning a hold up for large amounts of wine cargo.

When asked if Brexit threatens U.K.'s position as a hub, Deglise said that despite the uncertainty, he thinks the U.K. will remain important. He added, however, that it is threatened by other international wine hubs, including Hong Kong.