Jim Barry Wines, based in the Clare Valley in South Australia, was fortunate that it was only in very early stages of planning to export to China when heavy tariffs were imposed.
Howard Park Wines boss Jeff Burch says Australian wine producers may be a little more ‘gun-shy’ about a full-scale return to China exports but the profit margins are the highest of any market.
Shares in Treasury Wine Estates, the owner of the Penfolds brand, have climbed by 6 per cent in the past two trading days on the ASX.
Australian wine companies say they will be more reticent about a full-scale return to exporting wine to China if a geopolitical thaw eventuates and China drops its punitive tariffs.
But the lucrative profit margins, sheer size of the China market and the oversupply of red wine left in the wake of a shutdown of Australia’s most profitable export channel means they would re-ignite sales to China, but be more careful about diversifying in the future.
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Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com
