Australian wine exports to be hit by coronavirus outbreak

Wine exports to China, Australia’s biggest market, are set to suffer due to the coronavirus outbreak, the industry warns.

A young couple enjoy Australian wine at a bar in Beijing. Picture: Shannon Fagan

The peak industry group representing Australia’s $6bn wine sector expects wine exports to the nation’s biggest market, China, to suffer this year due to the outbreak and spread of the coronavirus.

Wine Australia, which released export data for calendar 2019 that showed a 3 per cent rise in the value of wine exports to $2.91bn, said it was still too early to predict the impact to wine sales into China because of the virus.

But wine purchases in China would suffer, it said.

“Looking ahead into 2020, we anticipate that coronavirus will have an impact on sales, particularly to China, but at this stage it is difficult to predict the degree of that impact,” said Wine Australia chief executive Andreas Clark.

“Also, our first concern is people’s wellbeing in China and elsewhere and there will be time down the track to consider other impacts,” he said.

Change in wine exports to the top 10 markets

It’s feared consumption of Australian wine in China will be hit by a downturn in social gatherings as concern about the virus spreads.

The situation has been worsened by the ban on non-citizen travellers entering Australia from China, because Chinese tourists are big spenders at Australian cellar doors.

Wine Australia data for the 12 months to December 2019 underline the importance of the China market.

Wine exports to China, Hong Kong and Macau were up by 12 per cent in value to $1.28bn, while volume declined 17 per cent in volume to 142 million litres.

Average value increased by 35 per cent to $8.99 per litre. Both value and average value are calendar year records.

“While the total value of wine imported by China has declined, Australia has consolidated its position as the number one imported country of origin ahead of France,” Wine Australia said.

“Australia’s export value to China continued growing in 2019 while the value of French imports continued the decline that commenced in 2018.”

Australia now holds a 35 per cent value share of China’s total wine imports compared with France with 29 per cent. Chile is number one by volume but third in value with a 14 per cent share. More than half of Chile’s exports to China are unpackaged, compared to 15 per cent of Australia’s exports.

For 2019 exports of higher valued wines – those above $10 per litre – reached a record value of $1.1bn.

Australian wine exports by price segment

Mr Clark said the sector had focused on growing exports at higher price points and the results reflected the success of the sector’s strategy.

“Australian wine companies have been very active in our export markets and the value of exports has now increased for six consecutive years,” he said.

In the year ended December 2019, Australia exported wine to 120 markets. Asia remained the growth centre for Australian exports.

Exports to Northeast Asia increased by 11 per cent to $1.37bn and those to Southeast Asia rose by 17 per cent to $200m. The Middle East also saw growth, up 4 per cent to $34m.

The top five destinations by value were:

* China (including Hong Kong and Macau) was up 12 per cent to $1.28bn;

* USA, down 1 per cent to $419m;

* UK, down 9 per cent to $352m;

* Canada, down 13 per cent to $183m;

* Singapore, up 18 per cent to $105m.