China-Australia relations: wine exports to mainland China are way down, but it remains the top market

Australia sold 45 per cent less wine to mainland China in the financial year ended in June; excluding that loss, exports to other markets were up 12 per cent

Britain bought 23 per cent more Australian wine in the 12-month period due to coronavirus lockdowns and exporters rushing shipments before Brexit took effect

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Excluding a huge drop in shipments to mainland China, Australia’s wine exports rose by 12 per cent in the 12-month period that ended in June. Photo: EPA-EFE

Published: 4:30am, 22 Jul 2021Updated: 4:50am, 22 Jul 2021

Australia’s increased wine shipments to new and existing markets were not able to offset the 45 per cent decline in sales to mainland China in the financial year that ended in June, industry group Wine Australia’s latest export report shows.

While the decline in exports to mainland China was the main driver of an overall 10 per cent drop in Australia’s total wine exports to A$2.56 billion (US$394.7 million), a shortage in wine available for export – especially from three consecutive low-yielding vintages in 2018, 2019 and 2020 – also accounted for the slower trade, according to Wine Australia’s general manager of corporate affairs and regulation, Rachel Triggs.

“Exports increased to the UK, Singapore, South Korea, Malaysia, Taiwan and Hong Kong by a combined A$240 million [US$177 million], but they did not offset the decline in exports to mainland China,” Triggs said.

Excluding the drop in exports to mainland China, Australia’s wine exports rose by 12 per cent.

The value of Australia’s wine exports to mainland China – its biggest wine export market – from last July to June was A$606 million. Before bilateral tensions worsened between the two countries last year, Australia’s wine exports to China were valued at roughly A$1 billion [US$736 million] a year, on average.

After Canberra pushed for an independent investigation into the origin of the coronavirus without consulting Beijing in April 2020, China imposed anti-dumping and anti-subsidy duties of between 116.2 per cent and 218.4 per cent on Australian wine in containers of two litres or less and unofficially restricted wine imports from Australia, forcing many Australian exporters to withdraw shipments for fear of delays and detentions at Chinese entry points.

Since the imposition of import tariffs, exports of Australian wine to mainland China dropped dramatically, Wine Australia added. As an example, total exports for the third and fourth quarters of the 2020–21 financial year that ended in June were worth just A$13 million, compared with A$419 million in the same period the prior year, before the tensions and trade disruptions started.