Australian wine in $2.39 billion rebound as exporters ferry red wines to reopened Chinese market

Australia’s wine exports for the year have surged as producers iced out of the Chinese market during geopolitical trade spats over the pandemic flood to restock the once-lucrative market with millions of litres of shiraz.

The removal of a four-year, 200 per cent tariff imposed on bottled wine sold from Australia to China in April has helped re-boost national exports by 34 per cent to $2.39 billion for the 12 months to September 2024, according to Wine Australia.

Volumes were up 7 per cent to 643 million litres, the highest shipments seen since August 2021.

Producers have been quick to make the most in the first six months of uninhibited trade, with $612 million worth of new exports sent to China in the period.

There has been a big push to diversify in the years since Australia abruptly lost the once-fruitful Chinese market, and Wine Australia manager Peter Bailey said it would take time to figure out the new normal in terms of demand.

“It’s important to note that shipments in these first six months are likely to be characteristic of re-stocking Australian wine after a long absence. Export levels are not equivalent to retail figures, and it will take time before it is evident how Chinese consumers are reacting to having Australian wine back in market,” he said.

“Despite this recent growth in exports, it is increasingly important to pursue market diversification and defend our share in other wine markets.”

About 59 million litres of wine was exported to China. Mr Bailey said the impact on export value was higher than volumes because the products being sold were higher-end.

Wine Australia observed in its report that Chinese consumers were drinking less wine overall, in line with a broader downward trend in global wine consumption. The group believes this is due to consumers thinking more about their health and their wallets.

“Shipping delays and increased shipping costs due to regional conflicts are also making it harder for wine exporters to get their products into market,” Mr Bailey noted.

Red wines were still the drop of choice for Chinese buyers, making up 90 per cent of shipments for the 12 months. Shiraz was the favourite, with 30 million litres sent abroad, followed by cabernet sauvignon with 14 million litres.

The number of Australian wine exporting businesses grew from 1247 to 1671 during the 12 months to September 2024, with about 730 of those started up in the past 12 months, and the bulk of produce was bound for China.

The UK is Australia’s second-biggest market with exports worth about $362mduring the year. But there was a decline in sales to the third-largest market in the US, which imported about 21 million litres less from Australia than the previous year.

In all, the value of exports to everywhere except China were considered “stable” at $1.78b, and down in volume by 3 per cent to 585 million litres.