Taylors Wine sweats on Clare Valley shipment to China

Taylors Wine chief executive Mitchell Taylor will know just before Christmas if he will be the latest victim of souring trade relations with China.

Mitchell Taylor of Taylors Wines: ‘We are quite concerned, from the all the rumours, all the uncertainty.’

Taylors Wine chief executive Mitchell Taylor will know just before Christmas if he will be the latest target of Chinese government payback for the souring trade relationship with Australia, as four shipping containers carrying his premium red wine from the Clare Valley arrive at port to be inspected by Chinese customs.

Only a month ago Taylors, which is a third-generation family-owned winemaker, had its wine held up at a Chinese port when customs officials demanded documentation that proved the wine group was more than 50 years old, as stated on its bottle packaging.

Farcical of course, but one of the many bureaucratic hoops Australian businesses must now go through to conduct business in China. Mr Taylor eventually tracked down historic documents showing Taylors’ winemaking history does go back to the 1950s.

Now shipments of his winery’s best reds, which his Chinese customers love — such as St Andrews and his special release The Visionary and The Legacy — are heading to China, although he almost took them off the ship given recent concerns about Australian wine being rejected at Chinese ports.

“They (the four containers) went from Adelaide to Melbourne. We considered whether to take them off the boat in Melbourne but it looked a bit too difficult, so they are on their way to China.

“It will arrive in China in about two to three weeks. We have heard nothing yet about hold-ups and there has been no official announcement,’’ Mr Taylor told The Australian.

It comes at a time when the Chinese government is investigating anti-dumping allegations against Australian wine exporters, a move viewed by many as a thinly veiled attack on the Australian government, along with recent tariffs on barley and turning back seafood and timber at ports. Speculation has been swirling through the $3bn Australian wine export market that new restrictions could be imposed in coming weeks.

“We are quite concerned, from the all the rumours, all the uncertainty,” Mr Taylor said.

But domestically Taylors is performing strongly, despite the ravages of drought, bushfires and COVID-19, with its fiscal 2020 accounts showing sales up strongly from $64.93m to $72.26m. Profits were only slightly up to $3.51m as harsh weather took its toll.

Taylors’ sales were boosted during COVID-19 restrictions as consumers enjoyed their favourite wins at home. Picture: Dominic Loneragan

Mr Taylor said the winemaker’s sales were boosted in the second half as consumers pivoted from restaurants and bars shut down due to COVID-19 restrictions to ordering their favourite wine at a bottle shop and drinking at home.

The business actually more than covered the sales lost at venues as Taylors traditionally has always been stronger in retail stores than on restaurant wine lists.

“With COVID-19 and lockdowns in place we found that through our channels a lot of wines being a trusted brand in the off-premise (retail stores) really helped our sales.

“We found that with our strong and trusted brand, and our research indicates this, that we were able to have increased sales over the second half.”

The lift comes despite Taylors’ high-end and high-margin duty free channel, where Chinese tourists are fond of its range of special release and gift pack wines, coming to a screeching halt as air traffic all but disappeared and airport duty-free stores became ghost towns.

“All of that stopped, but what was good was that it was more than compensated by very strong bottle shop sales in both the independent and the established chains. Our traditional brand tends to be a bit stronger in the off-premise market. We do sell to some of the hotels and fine restaurants, but really the off-premise part is the driver of our business.”