Australian wine exports to China show big rise

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The new Chinese love affair with wine has been reflected in a big jump in Australian exports to China in 2017.

Wine exports grew by 63 percent by value, largely the result of increased high-end sales and a free trade agreement signed two years ago that cut tariffs from as high as 20 percent to around 3 percent, according to data from industry group Wine Australia.

Excluding Hong Kong, Chinese sales hit 848 million Australian dollars (676m US dollars) for the year, more than doubling since the agreement between the two nations took effect in December 2015.

Nineteen percent of Australia’s wine by volume was sold in China. /Reuters Photo.‍

The rise also helped Australia boost its total wine shipments to their highest in a decade last year, up 15 percent to A$2.56 billion or 2.05 billion US dollars, according to data from industry group Wine Australia.

The tariff cut and lower shipping costs than European and US rivals have made Australian wines more competitive in China, where their reputation as a premium product is growing, said Stephanie Menere, financial controller at Canberra-based wine exporter Inland Trading Co.

“I think this year we’ll see more of an increase again because of the tariffs being reduced,” she said. Tariffs are scheduled to be eliminated by 2019 under the free trade deal.

Australia’s quarter-share of the Chinese wine market is still only a little more than half that of France‘s.

The boom has also lured Chinese producers to look at Australian terroir, with the purchase last month of a majority stake in Clare Valley vineyard Kilikanoon by Yantai Changyu Pioneer Wine Co Ltd for 15.5 million US dollars, following several smaller deals in recent years.

Nineteen percent of Australia’s wine by volume was sold in China. The fastest-growing segment of the export market was for expensive wine valued at more than A$200 per bottle.

Source(s): Reuters