Australia Overtakes France As Biggest Wine Exporter To China

As was predicted earlier this year, Australia has now overtaken France as the biggest exporter of wine to ChinaPreviously France occupied the top spot followed by Australia and Chile in third place.Recently released figures show that during the first five months of this year Australia became the most imported wine category in mainland China by value.

This is welcome news for the Australian wine industry which has turned its focus to growing value during the last couple of years. “The strong growth in average value is positive for the wine sector and the broader economy as it lifts returns for wine businesses and flows through to regional economies through higher grape prices,” remarked Wine Australia chief executive Andreas Clark.

The accelerated success of Australian exports in China has largely been driven and facilitated by the China Australian Free Trade Agreement which came into force on the 1st of January. Under this agreement all import duties have been removedfrom Australian bottled and bulk wines entering China.

Total Australian wine exports are now hitting $2.86 billion in value with growth largely driven by the growing Chinese appetite for Australian wines. Over the past financial year exports to China have grown by 7% to reach an impressive $1.2 billion.

This strong growth pattern is consistent with wider trends which have seen wine imports by volume double over the past five years. This mirrors a dramatic rise in Chinese wine consumption which is estimated to have grown by between 40% and 60% between 2011 and 2018.

“China is set to change global markets for wines dramatically, just as it has been doing and will continue to do for so many other products,” commented Professor Kym Anderson of Adelaide University“While rice wine has traditionally been the most common in Asia, income growth in China and a preference swing towards grape wine is gradually changing the region’s consumption situation.”

Australian wine exports to China currently have an average price per litre of$6.64 which is nearly double the global average. “China is our highest value market and any exporting country should always prioritise maximising price and returns of their products,” explained Chinese wine export pioneer Warren Randall who co-owns Seppeltsfield Wines in the Barossa Valley. “At $6.64 per litre FOB or $60 a dozen average price, China should be the number one priority for Australian wineries.”

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