China's high tariffs on Australian wine exports to China will be a major blow to Australian wine exporters, and finding an alternative market to China will be no easy task, industry insiders said.
Image from: AOC Financial Online
Industry analysts say that the potential alternative markets for Australian wine are the UK, Europe and the US. In the UK market, Australian wine exporters have a high-volume, low-margin strategy, which is not comparable to the Chinese market in terms of sales revenue and profitability.
In continental Europe, where consumers prefer to buy local products, Australian wines do not have a competitive advantage.
While the US is a potential market, the local market is currently dominated by local producers. In addition, there is limited acceptance of premium Australian wine products by U.S. consumers.