Seppeltsfield’s Warren Randall bullish on return of China wine exports

Seppeltsfield’s Warren Randall is gearing up for a revival of wine exports to China, hoping a breakthrough on the trade freeze with Beijing could be weeks away.

Pent-up demand for Australian wine will see a rush of exports flow back into the Chinese market once trade restrictions are eased, according to industry titan Warren Randall, who is hopeful the first steps towards a return to more open trade could be just weeks away.

The owner of Seppeltsfield in the Barossa Valley has been reconnecting with customers in China since signs of a breakthrough in trade negotiations emerged, and recently returned from his 40th trip to the country that previously accounted for close to $1.3bn of Australian wine exports.

Mr Randall has been a vocal critic of China’s decision in 2020 to impose tariffs on Australian wine – a decision that has left the local wine industry scrambling to find other markets while facing a glut of red wine.

Last year Mr Randall launched a new 10-year strategy for his Randall Wine Group, pivoting away from China and targeting acquisitions of boutique premium brands with a focus on exports to other markets.

But that doesn’t mean he’s ignoring the once dominant Chinese market, where Randall had previously been on its way to selling about half of its annual production of bottled and premium bulk wine.

“The main message out of my trip, out of the 13 wineries that I visited, was the optimism for Australian wine,” Mr Randall said.

“They’ve had a big taste of Spanish, southern French, Chilean, Argentinian and Eastern European – they’ve had a taste of all those wines while we’ve been absent, while we’ve been locked out – but they still want Australian wine, and that’s a big tick for the quality of the wines that we make in this country.

“Most other countries they import from sell lower-grade wine, entry-level wine. We sell icon, A-grade and B-grade wine to China. They can’t grow that themselves, they can’t import it from anywhere else, so it’s a happy hunting ground for us if we’ve got free pass, free transit.”

An artist’s impression of The Oscar hotel at Seppeltsfield.

Bulk wine sales, while excluded from the tariff measures in place since November 2020, have also been caught up in the cross-border trade row, with exporters reporting major customs delays and rejections at Chinese ports.

However after signing new deals with bulk wine customers during his recent trip, Mr Randall said he was hopeful of securing clearances to ramp up bulk wine exports as a first step towards the eventual removal of tariffs on bottled wine.

“What we’ve heard in China, and this is all anecdotal, is that they want to deal with one industry at a time,” he said.

“So first barley, and once that is sorted they’ll then start talking about wine. We would hope that barley within a month and ­perhaps bulk wine within two months.

“That would be a tremendous release and fillip for the Australian wine industry, and then secondly, rather punitive tariffs on our bottled wine in Australia – whether or not there’s a stepped reduction on the tariffs there, or whether they go straight to zero.”

While many Australian wine exporters have found new markets, China remains a big prize if the Albanese government can convince Beijing to drop the tariffs, which range from 116 per cent to 218 per cent and were introduced alongside sanctions on other products including barley, coal, beef and lobsters.

While Penfolds owner Treasury Wine Estates has warned the recovery in exports to China will be slow if and when tariffs are removed, it will nonetheless be welcome relief for South Australian wine producers, who are grappling with a perfect storm of global oversupply, rising input costs and one of the worst harvests in years. Mr Randall said this year had the latest start to a harvest in his 44-year career, with yields well down on previous years.

“It was incredible really – a long, slow, full ripening period and we finished picking on the 10th of May, which is almost unheard of,” he said.

“Some districts were worse than others. McLaren Vale had terrible weather conditions, just unbelievable – mild to cold, windy, cloudy, wet – disastrous conditions when the vines flower and set their fruit.

“McLaren Vale was 40 per cent down, Barossa was 10 to 15 per cent down, Clare was about average, Riverland’s way down, Langhorne Creek and Currency Creek well down.”

Mr Randall said construction of The Oscar, a new $50m six-star luxury hotel at Seppeltsfield, was on track to commence this year.

“That’s all proceeding really well with the consultants and the council – we’ve marked it all out, vineyards removed, roads, ingress, bridges all decided … it will be a two-year build.”