China's homegrown red wine faces bitter competition as foreign brands catch up in luring domestic consumers.

A report released Friday showed decreasing sales of domestic red wine, which stood at 40.8 billion yuan (6.64 billion US dollars) in 2013, a year-on-year drop of 8.52 percent.

Total sales volume of imported red wine dropped by 1 percent to 9.68 billion yuan last year, or about 20 percent of the Chinese market, and is still growing, according to the Fortune Character Institute (FCI), the luxury research and consulting agency that compiled the report.

The report also showed that the average price of foreign red wine hit a record high of 4.15 dollars per liter, a 3.5-percent year-on-year expansion and a 439-percent increase from 2002.

Zhou Ting, dean of the FCI, said that after years of development, Chinese consumers' taste in red wine has evolved, prompting demand for quality wine.

The institute predicts that overseas red wine will grab half of the Chinese market in 2020 and reach 80 percent of the market share in 2030.