With the total elimination of import tariffs on Australian wine in China in January of this year, Australian producers are in an incredibly strong position to consolidate and extend their reach into the Chinese wine market. Although Australia currently only has just under a quarter of the Chinese wine market and comes second to France in terms of the value of imports, these favourable new conditions are excellent news to ambitious Australian producers and brands.
Thanks to the combination of zero tariffs and low shipping costs Australian wines are now far more competitive compared to their European and South American rivals. Currently producers based in the EU, South Africa, and Argentina face a 14% import tariff while the USA has tariffs of 24%.
One particular area of success for Australian producers is the premium wine market in China which is predicted to grow to $19.5 billion by 2022. In fact, the fastest growing category of Australia’s export market is wine valued at A$200 per bottle and over. According to David Lucas, Wine Australia’s Regional General Manager North Asia, “There is continuing evidence of premium brands performing well with over half of the overall growth being achieved by wines above A$20 per litre FOB.”
It is still too early to give a detailed report on how the elimination of all import tariffs will affect Australian imports in China, but all the indications suggest a very bright future for those producers and brands who set their sights on the buoyant Chinese wine market.