In 2018, Australian wine exports increased by 10% to A$2.82 billion (about US$2 billion), and China once again leading the way. According to China Customs data, Australia is currently the second largest source of bottled wine imports in China. In 2017, exports exceeded US$682 million, behind France’s US$1.05 billion.
Wine Australia (an Australian Government statutory authority) announced that a total of 94 million nine-liter cases of Australian wine were sold worldwide in 2018, a 5% increase from 2017. In particular, red wine, which continues to grow at a hot rate, currently accounts for 76% of Australian wine exports.
China is not only the largest buyer of Australian wines, but also the fastest growing market with exports, including Hong Kong and Macau totaling A$1.14 billion (about US$812 million); an increase of 18% over 2017.
In recent years, China has been the main engine room of Australian wine value growth. Wine Australia’s chief executive officer, Andreas Clark, said , “We’re in a really strong position in China, in terms of the continuing trade’s appreciation for what Australian wine has to offer across all our price points, so we have a really solid platform of what we’re taking to market there.”
Growth has also occurred in most major markets, including the United Kingdom, Japan, Canada, New Zealand and Singapore, but the United States continues to decline slightly.
Source: Wine Australia
In fact, since the signing of the China-Australia Free Trade Agreement (FTA) in 2015, the Australian wine market has had more sales and investment opportunities. During this period, the level of tariff on wine has gradually decreased. Australian Agriculture Minister David Littleproud said the FTA between Australia and China has boosted significant growth in exports to China over the past 12 months.
And Australia’s agricultural products, including wine, most of the fruits and vegetables, seafood and some dairy products into China’s tariffs will be basically eliminated on January 1. It means that these products will be cheaper for Chinese consumers.
French wines and other imported wines are currently subject to a 14% import tax. For Australia, the tax rate is zero, coupled with the Australian government’s $50 million export stimulus plan, many believe that Australia will soon surpass France to become China’s largest source of imported wine.
With the implementation of the zero tariff policy and the increasing popularity of Australian wines in China, the market is now a huge opportunity for Australian wine producers. It is expected that the amount and quantity of wine exports for China will further increase.