Wine Australia export figures point to Chinese revival amid global decline

Australian wine exports to China have surged past $1bn in the first full year of trade since tariffs were lifted, but Trump’s trade war looms as a worry for producers.

Australian wine exports to China have surged past $1bn. Picture: Getty Images

Australian wine exports to China have surged past $1bn in the first full year of trade since tariffs were lifted by authorities in Beijing, but a decline in wine consumption globally continues to weigh on sales into other countries.

Australian wine exports increased by 41 per cent to $2.64bn in the 12 months to March, according to the latest figures from Wine Australia, fuelled by $1.03bn in sales to China, which has re-emerged as the dominant export market.

Exports to China peaked at $1.2bn before tariffs of up to 218 per cent were slapped on Australian wine in March 2021.

While the latest figures show a swift rebound for Australian wine producers, Wine Australia market insights manager Peter Bailey warned most of the demand out of China was focused at the premium end of the market.

“While the total value of shipments to mainland China is now at a similar level to the years immediately before tariffs on Australian bottled wine came into force, volume in the last 12 months is 23 per cent smaller than the five-year average between 2016 and 2020, and 44 per cent below the peak in 2018,” he said.

China’s renewed demand for Australian wine has been focused at the premium end of the market. Picture: AFP

“Additionally, the average value of packaged wine shipped to mainland China was $23 per litre, much higher than any other major export market. The lower volume and high average value demonstrate that mainland China is a premium market for Australian wine and will therefore not solve oversupply issues in Australia.”

The average value of wine exports from Australia increased by 33 per cent in the 12 months to March to $4.09 per litre – the highest average value in almost two decades.

However outside of China, exports to the rest of the world fell by 13 per cent to a 10-year low of $1.62bn, while export volumes outside of China were down 9 per cent to 551 million litres – the lowest level in more than 20 years.

Exports to three of Australia’s top five markets were lower in the year to March, with the UK down 3 per cent to $353m, the US down 9 per cent to $323m and Hong Kong 47 per cent lower at $154m.

Wine exports to the US – Australia’s third largest market – are at their lowest level since the early 2000s, and Wine Australia warned the situation could get worse in light of US President Donald Trump’s tariffs.

“While there has been a long-term trend of consumers drinking less alcohol due to health and wellness concerns, more recent cost-of-living pressures could continue or potentially get worse in certain markets, given the economic and political turmoil taking place globally,” Wine Australia said.

“Escalating trade wars have the potential to increase prices, complicate supply chains, and rapidly change the competitive landscape in key wine markets in the near-term.

“Because there are a number of factors to account for – how much of the increased cost will get passed on to consumers, the effect of a global trade war on foreign exchange rates, and whether consumers will start to switch to domestic wines – it is hard to predict how this will affect Australian wine exports to the US in the short-to-medium term.”

The return of the Chinese market has driven an increase in red wine exports, with shiraz and cabernet sauvignon the two most popular varieties. Shiraz exports were up 66 per cent to $595.3m, while exports of cabernet sauvignon were up 59 per cent $560.4m.

Originally published as Wine Australia export figures point to Chinese revival amid global decline