Australian wine exports hit hard by China tarrifs, but resilient despite headwinds

Australian wine exports to China have plunged 96 per cent, with $313 million in revenue lost from the lucrative trade in the past 12 months.

The Wine Australia figures reveal the depth of the financial cost of China's tariffs on Australian wine.

Wine Australia chief executive officer Andreas Clark said as the tariffs applied to product in bottles under two litres, the decline in exports to China was mainly in bottled exports.

“This, along with increased unpackaged shipments to other markets, such as the UK, resulted in a drop in the share of bottled exports in the export mix, from 46 per cent of total volume in the 12 months ended March 2020 to 41 per cent in the same period in 2021,” he said,

“This led to the decline in the overall average value of exports.”

However, overall Australian wine exports declined by four per cent in value to $2.77 billion in the 12 months to March 2021, compared with the previous corresponding period.

Export volume declined by one per cent to 724 million litres, while the average price per litre for wine exports declined by three per cent to $3.82 free on board.

“Notwithstanding the impact of China’s tariffs, we were still looking at a potential downturn in exports over this period simply due to the supply situation,” Mr Clark said.

There has been significant growth in exports to Europe (including the United Kindom), which was up 23 per cent to $710 million, the highest value in a decade.

“There was also growth to North America, up five per cent to $628 million, and Oceania, up seven per cent to $112 million,” Mr Clark said.

If exports to mainland China were excluded for the past 12 months, the Wine Australia results would show positive growth in export value with a 10 per cent growth to $1.9 billion and eight per cent in volume to 646 million litres.