South Australia’s wine exports plummet as China effect takes hold across Australia

A huge drop in the state’s wine exports is due to China all but closing off the lucrative trade route and smaller vintages, the sector says, but it’s fighting to claw back lost trade.

THE value of South Australia’s wine exports has plummeted by almost a quarter as China’s decision to impose crippling tariffs reverberates throughout the regions.

Wine Australia’s latest data shows the state sent about $1.6bn worth of wine overseas in the year to September 30. That was down $460m, or 23 per cent, on the previous year.

The Barossa Valley, Clare Valley and McLaren Vale were among those recording the largest dips in the value of their shipments. China imposed tariffs of up to 212 per cent on Australian wine in November, closing off the trade route after political tension between the two countries

Coonawarra Vignerons chairman Pete Balnaves at Balnaves of Coonawarra winery. Picture: Bianca De Marchi

Clinton Taylor, of Taylors Wines in Auburn, said China was formerly the company’s most profitable market and the business was looking to expand into other countries such as Indonesia and the US.

“It’s been a double whammy with Covid as well, because we haven’t been able to really get out and do roadshows and expos,” Mr Taylor said.

Pete Balnaves, who heads up Coonawarra Vignerons, said higher shipping costs – and a doubling of the time taken to ship exports – were also hampering the industry amid a slowdown in overseas port operations.

“There’s a concern because if you’ve got a market waiting for your wine and you can’t get it over there quick enough, they want to keep their shelf space full and we want to keep backing up our sales with more sales,” he said.

In the year to September 2020, before the tariffs, SA sent $817m worth of wine to China – the lion’s share of the country’s $1.2bn in wine exports.

Taylors Wines company director and winery operations general manager Clinton Taylor with export supervisor Kaye Oliver. Picture: Naomi Jellicoe

“The full effect of the Chinese market coming out of the old equation is probably going to be felt in the next 12-18 months,” Mr Balnaves said.

Amid the huge challenge of replacing Chinese customers, the sector is looking towards the planned easing of state and national borders as a step towards recovery.

Mr Balnaves said the region usually drew up to 65 per cent of its cellar door traffic from Victoria. “So there’s been a huge constraint on traffic into the region,” he said.

Barossa Grape & Wine Association chief executive James March said the region was seeing growth in exports to countries including New Zealand, the US, UK, South Korea, Hong Kong and Singapore.

“We’re seeing positive developments but we’re also aware that no other market is going to make up for the loss of the China market alone,” Mr March said.

The drop in the value of SA’s wine exports was on par with a 24 per cent value decline across the country. Australia sent $2.3bn worth of wine overseas.

In addition to the Chinese tariffs, Wine Australia said exports had dipped because of low inventory levels following small vintages between 2018 and 2020.

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