Recently, an Australian wine retailer revealed that the price of Australian wine will soon drop.
Image courtesy of: Melbourne Microlife
The retailer said there are about 800 wine producers in Australia who together export a total of A$1.3 billion of wine to China.
But now, influenced by the relationship between Australia and China, these wine producers are scrambling to bring back to the local Australian market wines that would otherwise be exported to China.
This will lead to a large increase in supply, or even a surplus, in the local Australian market, which will cause wine prices to fall in the long run.
Anthony D"Anna, a wine producer at Boccaccio Cellars in suburban Melbourne, says wine lovers are in a golden age. Because the supply of local wine will expand, wine prices will also trend downward accordingly.
However, Anthony also warned that although Australian wine prices will fall, it is likely that most customers will not buy it.
This is because Australian wine merchants have been targeting the Chinese market for the past few years, resulting in a shortage of local distribution and high prices for local wines, which many consumers are very unhappy about.
This phenomenon has also caused some fine wine lovers to prefer those brands from Italy and France.
Gradually, these consumers are beginning to realize that they can buy fine wines from Bordeaux for the same price.
When consumers' interests change, it may not be easy to win back their attention just by cutting prices.
Although Tim Ford, CEO of Cognac, claimed back in November that wine prices would not drop, many wine retailers do not think so.
There is no doubt that 20% of our exports and 40% of our profits come from China and the tariffs will put huge downward pressure on the whole industry, said Chris Byrne, owner of Riverland Wine Winery in Riverland, Australia's largest wine grape region.
Wine prices will be hit hard, perhaps a little less for white wines, but red wines will definitely face huge pressure to reduce prices.
Many wine producers have said that with the closing of China, a large amount of wine must be shifted to domestic sales.
In the next few years, supply and demand will be tilted toward consumers. Therefore, the price decline is only a matter of time.
I believe a good time to stock up on wine is just around the corner, and I wonder if I'll be able to catch a wine price drop before Christmas this year.