Australian Exporters Capitalize on Musical Chairs in Chinese Wine Market

Australian Exporters Capitalize on Musical Chairs in Chinese Wine Market
Australian wine (2nd R) is displayed amongst other wines at a shop in Beijing on December 23, 2020.(Noel Celis/AFP) via Getty Images)
Daniel Y. Teng

Australia’s wine sector is seeing “early signs” of success at finding alternative markets to China following the imposition of hefty tariffs on exports, a move that has triggered a major reshuffle of top wine suppliers.

“Australia was the top wine importer to mainland China before the tariffs were introduced and as other wine producing nations move to fill the gap, there is further opportunity for Australian wines in the markets these nations were previously sending wine to,” Wine Australia told The Epoch Times in a statement.

In early February, the industry body released figures showing that Australian wine exports made significant gains in Singapore (up 108 percent to AU$166 million), Hong Kong (up 45 percent to $191 million), South Korea (up 74 percent to $47 million), Taiwan (up 65 percent to $31 million), and Thailand (up 31 percent to $28 million).

Since Australian wine exports to China were slapped with major tariffs in October 2020, ranging between 116 to 218 percent, the market has seen a “musical chairs” situation emerge with different exporters attempting to replace Australia’s previous lead.
According to the China Association of Imports and Exports of Wine and Spirits, France saw a 61.45 percent increase in the value of exports to China to US$687.8 million, followed by Chile (46.73 percent gain for US$138.5 million), and Italy (45.11 percent gain for US$67.2 million).

Meanwhile, Wine Australia said that while it was not possible to replace the Chinese market, diversification to other markets was gaining traction.

“Pleasingly there are early signs evident in export figures that Australian wine exporters are managing to re-direct wines that originally would have been bound for mainland China to other markets,” the body said. “These markets have a thirst for premium red wines, which is largely what was being shipped to China.”

Beijing’s tariffs on Australian wine came amid an ongoing economic coercion campaign in response to calls from the Morrison government for an investigation into the origins of COVID-19.

It sparked a veiled threat from then-Chinese Ambassador Cheng Jingye, and later saw Beijing roll out a series of trade sanctions targeting industries such as barley, coal, cotton, hay, logs, meat, wine, and rock lobsters.

Some measures deployed include arbitrary border testing and inspections, the imposition of tariffs, unwarranted delays in listing export establishments, and the issuing of import licenses.

The Australian government is now pushing the matter through the World Trade Organisation, along with a separate case over barley tariffs.
Daniel Y. Teng is based in Brisbane, Australia. He focuses on national affairs including federal politics, COVID-19 response, and Australia-China relations. Got a tip? Contact him at [email protected].
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