Australia grappling with how to offload 2.8 million wine bottles as China’s high tariffs bite

Vineyards nationwide have enough wine in domestic storage to fill 859 Olympic swimming pools that will take years to clear out

China, traditionally an avid purchaser of Australian wine, imposed hefty duties on the spirit in 2021 after ties between the two sides soured

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Bottles of wine imported from Australia are displayed for sale at a supermarket in Nantong, China’s Jiangsu province. Photo: VCG via Getty Images

Published: 2:47pm, 18 Aug 2023

Australia’s wine industry faces severe oversupply problems that will need years to resolve, experts say, pointing to Chinese tariffs, high production and export bottlenecks during the Covid-19 pandemic.

Vineyards nationwide have enough wine in domestic storage to fill 859 Olympic swimming pools, Rabobank said this week in its third-quarter wine report.

“That’s over two billion litres of wine, or over 2.8 million bottles,” said RaboResearch analyst Pia Piggott, adding that the inventory was depressing prices, particularly for commercial red wines.

Ties with biggest trading partner China deteriorated in 2020 after Australia called for an inquiry into the origins of Covid, triggering reprisals by Beijing, such as anti-dumping duties on Australian wine and barley.

The curbs battered the wine industry, with exports to China shrinking to just A$8.1 million (US$5.2 million) in the year to June, from a peak of A$1.2 billion for the year to January 2020, when the pandemic began to take hold.

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