Wine growth falls flat as Chinese tensions bite
TENSIONS between Australia and China have dramatically slowed the growth of wine sales to the nation’s largest trading partner.
A new report from industry group Wine Australia shows sales growth more than halved in the wake of the diplomatic tensions which impacted a number of wine makers including Treasury Wine Estates.
The report follows Australian wine being stranded at Chinese ports for several weeks earlier this year, threatening the billion-dollar export market.
China remains Australia’s biggest wine market, with annual sales of more than $1 billion. But growth for the year to September was 24 per cent – much weaker than the robust export sales growth of 51 per cent before the go-slow at Chinese ports.
Wine Australia is still optimistic about the future growth prospects of the giant Chinese market and believes that the slowdown could reflect a return to more normal and sustainable growth rates.
The Australian-Chinese trade relationship was thrown into turmoil in June when, for unexplained reasons, Australian wine was singled out at Chinese ports and its passage to customers constrained.
Intervention by the federal government, the wine industry and federal trade minister Steven Ciobo eventually saw the go-slow lifted.
The latest Wine Australia report shows wine exports to Northeast Asia grew by 24 per cent to $1.14 billion for the year to September 30.
The value of wine exports to China, including Hong Kong and Macau, also rose by 24 per cent to $1.06 billion. However, for the year to March – before the ‘go slow’ at Chinese ports emerged – sales to China were growing by 51 per cent.
Wine Australia CEO Andreas Clark said the latest update showed the nation’s wine industry had experienced “strong and sustainable” growth over the past year.
“Australia exports more than 60 per cent of the wine we produce, so it’s important that we continue to build our export markets,” he said.