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May 30, 2022 View:

Australian wine merchants say exports to China have dropped to almost zero

South Australian winemaker Jared White has spent nearly a decade expanding his business in China. However, in just a few months, all that effort has come to naught. This has nothing to do with the quality of the wine, but is the result of months of worsening diplomatic friction between China and Australia.

Image from: Globe

By mid-2020, White"s company was selling more than 96 percent of its wine to China, as many as 7 million bottles a year. But in November of that year, Beijing announced it had launched an anti-dumping investigation, imposing high tariffs on Australian wine. The Chinese government said the investigation was triggered by complaints from Chinese wine producers. White said he has not sold a single bottle of wine (in China) since then.

White is not the only one who had a similar experience. Australian wine exports to China fell to almost zero last December, according to industry group Wine Australia. for the whole of 2020, Australian wine exports to China fell 14 percent. Australia is the world's fifth-largest wine exporter. The wine-related industry contributes up to $35 billion to the country's economy each year.

China was Australia's largest wine market until last November, and in 2019, more than 1/3 of Australian wine exports went to China.

Chinese demand for wine is not limited to Australia. France remains the leading exporter of wine to China, with Australia in second place. Chinese demand for Chilean wine is also strong.

Victorian winemaker Purbrick says that in the past, 1/4 of his family winery's exports went to China. Now, that business is gone. Sales to China are now almost zero.

Most of the Australian vintners interviewed said they did not blame the Australian government. They expressed confidence that Canberra had done its best to negotiate with the Chinese side. But Purbrick said Canberra could perhaps have handled its relations with China in a more tactful way.

Some Australians also put the blame on the Chinese wine industry, which they say has taken lobbying action because of concerns about the growing popularity of low-priced Australian wines.

Whatever the problem, the Australian wine industry is suffering. Some Australian vintners are looking for new markets overseas, but there is concern that if things don't improve in China, there is simply no other market with comparable buying power to replace them. White also said it would be difficult to find new buyers under the epidemic.

And Chinese wine importers say the ban on Australian wines will have little impact on their business because they can easily be replaced by Chilean wines.