Australian wine exports plunged by more than a quarter in the year to the end of March 2022 as Chinese tariffs, global shipping chaos and sluggish demand following Covid stockpiling took their toll.
The industry’s attempts to invigorate particularly the North American market also seem to be failing, as value of exports to the UK, US and Canada are all falling.
In the year to the end of March 2022, Australian wine producers shipped A$2.05 billion (US$1.43 billion) worth of wine, down 26% from the previous corresponding period, while volume fell 13% to 628 million litres.
According to Australia’s wine promotion body, Wine Australia in its Export Report, “Excluding mainland China, exports declined by 3% in volume but increased in value by 7% to A$2.03 billion (US$1.411 billion) – the highest value since 2010.”
Exports to Singapore, Hong Kong, Thailand, South Korea, India, Japan and Taiwan were the key contributors to the growth in value, and they helped to mitigate the loss in demand from China market, which was once Australia’s biggest wine importer. High tariffs ranging from 116.2% to 218.4% imposed by China continued to impact Australian wine exporters.
Despite the increase in value of exports to markets outside China, it did not manage to offset the decline in value to China with a huge loss of A$844 million (US$587 million) in the review period.
The ongoing trade dispute between Australia and China has led to reports of millions of grapes being left to rot at vineyards across the country. These have severely affected small wine producers that used to focus only one 1 or two markets in the past.
Australia however is making tremendous effort to reduce its reliance on China and focus on other potential growth markets.
Canberra (Australia) lodged a formal complaint over China’s wine tariffs with the World Trade Organisation (WTO) in June 2021, and the Geneva-based body agreed to establish a dispute settlement panel to address the complaint in October. So far, no further developments from there.
