Look beyond China, leading exporters warn

Food industry heavyweights say there is a danger in focusing too much on one market, despite the significant potential in China.

Hugh Hamilton Wines chief executive Mary Hamilton said there were a number of barriers for smaller producers looking to export to China. Picture: Glenn Hunt / The Australian

The Chinese market remains one of huge potential for Australian food exporters but there needs to be a focus on other opportunities in the region amid fallout from Beijing’s recent trade bans, two leading exporters have warned.

Speaking at The Australian’s Global Food Forum on Wednesday, Costa Group chief executive Marc Werner and the chief executive of Hugh Hamilton Wines, Mary Hamilton, predicted significant opportunities for their Australian sales to the Chinese market.

But they stressed there were also opportunities in Southeast Asia and the US for quality Australian produce.

Mr Werner said Costa Foods was planning to expand its production operations in China to cater for demand for its high-quality blueberries.

He said the company, which began operating in China in 2013 and now has 10 blueberry farms in the country, was planning to double its footprint in the country from its current 450 hectares.

Richard Hamilton Wines Coonawarra.

“There has been a significant growth in the demand for premium blueberries (in China),” he said.

“It goes hand in hand with the unique genetics that we have provided as a blueberry grower over the past 25 years, which originated here in Australia,” he said.

“We are very optimistic. We are very bullish about the future as far as China is concerned.”

But he said there was a danger in focusing too much on one market, despite the significant potential in China.

“We cannot throw all our eggs in one basket,” Mr Werner said.

“It’s very tempting to have China on the management agenda every single day. But there are other opportunities out there.”

He said Costa was also focusing on market opportunities in Southeast Asia.

“Southeast Asia is on our doorstep,” he said. “That’s exactly where we want to leverage going forward.”

Hugh Hamilton Wines’ Ms Hamilton, said the potential to sell wines to China was “undisputed”. She said Hugh Hamilton Wines had already begun shipping wine to China following the lifting of tariffs earlier this year.

But she cautioned China was “not the easiest country to do business with”.

She said there were challenges in doing business with China including trying to get paid.

“As small producers, there are a lot of barriers for us, and they are not trade barriers but just difficulties.

“Getting paid is a concern. Most wine exporters will ask for the payment upfront. Can you imagine trying to chase down those debts (in China)? It would be really difficult.”

She said there were also challenges in the China market in terms of counterfeiting and protecting trademarks.

“They’ve got a completely different trademark legal system over there. Understanding where your wine ends up us very difficult in China”

While she said Australian wine exporters were keen to get back into selling to China, returning to the market that was cut off for several years by tariff barriers, it was not going to be easy.

“China 2.0 is not going to be a cinch,” she said. “It’s still going to be very challenging, but the size of the prize is very alluring. It’s not the only prize, which is why we should not be putting all of our eggs into that one basket.”

Ms Hamilton said she liked the market opportunities for Australian wine in other Asian countries. “I really like the rest of Asia as an opportunity for Australian wine. (The region has) got an enormous middle class burgeoning across all of the different markets.

“They’re just about all developing in that way; there is a true desire to want to bring wine into a part of a lifestyle.”

She said there was much to be done in terms of selling Australian wine into Asia. “But it’s growing and it’s a terrific partner for Australia from a time zone point of view, from a trade point of view.

“There’s a genuine interest in the premium product that we are producing.”

Ms Hamilton said the Australian wine industry needed to pitch itself as a premium product in its export profile given the high domestic cost base.

“It’s very important for Australian wines that we stay premium,” she said.

The wine industry’s efforts in the past to sell cheap Australian wine had not done the industry any favours, she said.

Asia was a market where customers want a premium product and North America was also potentially a big market for Australian wine.

“It’s a huge economy and a huge market,” Ms Hamilton said. “They already know how to drink wine. They love wine, but it is probably the most competitive market in the world for Australian wine.”

Ms Hamilton said she believed it was a “real error on behalf of the Australian wine industry to put all their eggs in the China basket”, which it had done before the imposition of tariffs in 2020.

“We did it at a government level. We did it at a national level. We did it as big companies, as small companies, as regional bodies.

“We put all of our eggs into China, and I think that was a big mistake. I think we’ve got to always look for a much more diversified view of exports to China.

“I understand why you go and put your fishing rod into the part of the river where the fish are. It’s very tempting to just stay there, but you’ve actually got to move the boat around a bit, and I think we didn’t do enough of that.

“It will continue to be a very tempting big juicy red apple. There’s a temptation that we’re all going to flock there again. I think we should be there, but we should do that in a more considered way.”