Wine

Australian wine export to China : Politics and Opportunities

Australian wine exports to China have experienced significant changes in the last two years. These changes have been influenced by a variety of factors such as trade tensions between Australia and China, the COVID-19 pandemic, and shifting consumer preferences.

In 2019, China was Australia‘s largest wine export market, accounting for approximately 39% of total wine exports. However, in November 2020, China imposed anti-dumping tariffs on Australian wine, which led to a sharp decline in exports. According to Wine Australia, in the 12 months to September 2021, Australian wine exports to China fell by 96% compared to the previous year.

One of the main reasons for these changes is the ongoing trade tensions between Australia and China. In 2018, Australia banned Chinese telecoms giant Huawei from participating in the development of its 5G network on national security grounds. This move, combined with Australia’s call for an independent inquiry into the origins of the COVID-19 pandemic, has led to strained relations between the two countries.

In addition to trade tensions, the COVID-19 pandemic has also impacted wine exports to China. The pandemic has disrupted global supply chains, leading to delays and increased costs for exporters. Furthermore, lockdowns and restrictions on hospitality venues have reduced demand for wine in China.

Despite these challenges, some Australian wineries have been successful in maintaining their market share in China. According to Wine Australia, in the 12 months to September 2021, the top five Australian wine exporters to China were Treasury Wine Estates, Australian Vintage Limited, Accolade Wines, Pernod Ricard Winemakers, and De Bortoli Wines. These companies accounted for approximately 70% of total Australian wine exports to China.

One trend that has emerged in the Chinese market is a preference for premium and boutique wines. Australian wineries that produce high-quality wines with unique stories and branding have been successful in attracting Chinese consumers. For example, Penfolds, owned by Treasury Wine Estates, is known for its premium wines, including the iconic Penfolds Grange, which has become a status symbol among China’s wealthy.

Looking ahead, the future of Australian wine exports to China remains uncertain. While some experts predict that the trade tensions will eventually ease, others suggest that the shift in consumer preferences towards premium wines may offer new opportunities for Australian wineries. However, increasing competition from other wine-producing countries such as France, Italy, and Chile may pose a challenge for Australian exporters.

In conclusion, the last two years have been a tumultuous time for Australian wine exports to China. Trade tensions, the COVID-19 pandemic, and shifting consumer preferences have all contributed to significant changes in the market. While some Australian wineries have been successful in maintaining their market share, the future of the industry remains uncertain.