If not China, where next for Australian wine?

In recent years, China’s wine market has blossomed, bolstered by ecommerce, legal-drinking-age consumer recruitment and female consumption. “Wine offers a modern, sophisticated drink for aspiring younger Chinese consumers. For women, it offers a much more stylish option than beer, and older consumers are attracted to the perceived health benefits,” notes Tommy Keeling, IWSR Research Director for Asia Pacific.

Imported wines in China took off around 2006, driven primarily by the popularity of French wines. While the run-up to 2013 saw explosive growth in imported premium wines, driven by government and corporate banqueting, the anti-corruption crackdown in 2013 led to declines in volume consumption. Imported wines found popularity again in 2015, driven by mostly younger consumers who perceive wine as chic, modern and healthy. The explosion in smartphone use, social media apps and mobile ecommerce has turbo-charged this growth as well.

Now, the Chinese imported wine market is largely driven by French, Australian and Chilean wines.

“If the ban were to go ahead, Chinese consumers are unlikely to simply switch back to local wine,” notes Keeling. “Australian wine is perceived to be of higher quality and is offered at a similar price point to local options. Chilean wines seem more likely to fill the gap in the medium term – however, Chilean wine is only half the volume of Australian wine in China,” Keeling adds.

For Australian winemakers, although China is the third largest export market in volume terms, it is number one in value terms, as the average price of Australian wine sold in China is quite high. Outside of the Chinese export market, opportunities for Australian wine producers could come from increasing their focus on other international markets, such as the US, UK and New Zealand, although with very different pricing strategies.

You may also be interested in reading:

Baijiu: the largest spirits category the US has never heard of
Covid-19 presents opportunities for the US still wine market
Six ways Brexit could change the way we trade wine