In the wake of China’s recent decision to lift punitive tariffs on Australian wine, imports from Down Under have witnessed a significant upsurge. However, as producers return to the Chinese market, they are likely to confront a landscape that has evolved since their absence.
According to the latest data from the China Chamber of Commerce of Import & Export of Foodstuffs, Native Produce and Animal By-products, the growth in Australian wine imports has been nothing short of explosive. In the first quarter of this year alone, China imported 2.2 million liters of Australian wine, marking a more than fivefold increase compared to the same period last year. The trade volume amounted to USD5.8 million, soaring nearly seven times higher than the previous year. As a result, Australian wines now account for 2.4 percent of all imported wines in China, a substantial jump from less than 0.3 percent recorded last year.
Industry insiders speculate that the influx of Australian wines into the Chinese market, particularly those that were backlogged during the tariff period, will contribute to reactivating consumption. This optimism is reflected in the March data, with promising signs of recovery. Furthermore, with the peak season approaching in the second half of the year, observers are keen to monitor any further developments closely.
However, despite this positive outlook, challenges lie ahead. Consumption habits in China have undergone a notable shift, with wine consumption declining from 1.8 billion liters in 2018 to 680 million liters in 2023, according to a report by the International Organisation of Vine and Wine. The value of wine imports also plummeted to a decade-low of nearly USD1.2 billion, marking a 60 percent decrease from the peak in 2018.
Commenting on the situation, Li Wei, Chairman of Swan Wine Group, a major wine exporter to China, acknowledged that while the return of Australian wines is expected to stimulate the market, altering consumption patterns will prove to be a formidable challenge. With the focus now shifting from growth to retaining existing market share, wine producers will need to navigate a fiercely competitive landscape in China’s evolving wine market.
