Food & Drinks

Australian wine exports continue to suffer due to China fight

Annual exports of Australian wine have dropped by 19% in value and by 10% in volume amid falling sales in China and Europe.

In the year to 30 June, the value of shipments stood at AUD$2.08bn (US$1.44bn), with volumes at 625 million litres, according to figures from trade association Wine Australia.

Wineries reported “significant growth” in exports to south-east Asia, up 51% to AUD$314m. Australian wine exports to North America grew by 5% to AUD$612m.

However, Australian winemakers saw a 64% decline in exports to north-east Asia, which includes mainland China, to AUD$328m and a 9% fall in shipments to Europe to AUD$658m.

In November 2020, China placed substantial trade tariffs on bottled wine imports from Australia. This action effectively priced Australian producers out of the market. The move came as tensions between the two countries increased, with the Chinese government accusing Australian winemakers of selling cheaper wine into the country thanks to favourable government subsidies. Australia has denied any wrongdoing.

“When mainland China is excluded from the data, exports increased by 5% in value to AUD$2.06bn (US$1.42bn), an increase of AUD$105m – the highest value since 2009–2010,” said Wine Australia market insights manager Peter Bailey.

“Still red wine accounted for 92% of the value of exports at AUD10 or more FOB [freight on board] per litre. This is critical as the reduction in exports to mainland China was predominantly still red wine. Off much smaller bases, still white wine and rosé also grew strongly in this price segment,” said Bailey.

Earlier this month, China’s third-largest wine producer, Weilong Grape Co., sold roughly 400 hectares of vineyards it was operating in southern Australia. The group says it made the sale in order to “alleviate” managerial and financial stress for its Australian subsidiary.

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The post Australian wine exports continue to suffer due to China fight appeared first on Just Drinks.

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