Australian wine industry reeling as exports fall 26 per cent

China’s cultural approach to alcohol consumption saw demand for wine significantly drop off when restrictions curtailed people’s movement this year. And as the biggest wine importer into the country, Australia was not immune to the effects.

Coronavirus has led to a sharp drop in exports of Australian wine in the first three months of 2020. Picture: AFP/William West

AUSTRALIA’S wine industry felt the brunt of the damage wrought by coronavirus in March, when export volumes passing through the nation’s biggest container port dropped by more than 26 per cent.

New Port of Melbourne figures show 4520 containers left the port between January 1 and March 30, compared to 6164 in the previous three-month period, and 15 per cent less compared to the same quarter last year.

And a marked turnaround is unlikely, with the International Wine and Spirit Record – the global measure of wine and spirit data – predicting a decline of 13 per cent in wine consumption globally in 2020, and a slow recovery.

A decline of this size would lead to a gap between supply and demand of about 21 per cent, higher than it has been for more than 10 years.

Mitchell Taylor, who runs Clare Valley’s Taylors Wines, one of the first Australian wineries to export to China, said the impact of the virus on sales there hit home in March.

“We had all of our February and March orders to replenish stock (in China) put on hold. In the end we didn’t do any export sales for three months,” Mr Taylor said. “We’ve had ups and downs, but never a gap that long.”

Orders have since resumed, he said, but not at their usual volume. The company ordinarily exports almost $3 million of wine to China annually.

Australian Bureau of Agricultural and Resource Economics and Sciences’ head of forecasting and trade, Jared Greenville, said the figures pointed primarily to China and the country’s cultural approach to alcohol consumption, which is usually in large groups.

Australia eclipsed France as the biggest exporter of wine to China last year.

“So with all the restrictions placed on peoples’ movement, we saw a dip in exports,” he said.

The Port of Melbourne figures also reveal sharp falls in exports of Riverina cotton and rice and Victorian wheat.

But Dr Greenville said these patterns were driven by high water prices and a prolonged drought across much of eastern Australia that saw Victorian wheat sold domestically instead.

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