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China further reduces tariffs on Australian wine

Records continue to tumble for Australia’s wine industry, with new statistics showing export values are the highest in a decade.

It comes as China reinforces itself as a boom market for Australian product, with a 51 per cent yearly growth marking the first time Australia has exported more than $1 billion of wine to a single country.

Data from Wine Australia shows a 16 per cent spike in overall value, to hit $2.65 billion between March 2017 to March 2018.The volume of exports also grew 10 per cent in the same time frame, hitting a near-record 844 million litres of wine.

Wine Australia chief executive Andreas Clark said it was no mean feat for a once-struggling industry “The China story is really impressive and it has still got a long way to go,” he said. “The success has seemingly come quite quickly, but that said, those who are really enjoying the success there have actually been there for 10 to 15 years.”

The boom in value is demonstrated by Aussie wine fetching more at the price point, with bottled product seeing an average value of $5.74 per litre. Mr Clark said it had done wonders for winemakers and producers looking to market a quality product.

Can the Chinese market continue to grow?

China is Australia’s second-largest market by volume, with Australia exporting about 10 million cases more to the United Kingdom. However, the country has kicked ahead in value terms, with the gap between the second-placed United States now more than $600 million.

“The Government anticipates the value and volume of wine exports to China will only grow as tariffs for Australian wine into China will be entirely removed from January 1 next year,” Assistant Minister for Agriculture and Water Resources Anne Ruston said. She also mentioned that tariffs into China likely to be scrapped by next year, there was space to grow even further.

https://www.thedrinksbusiness.com/2018/01/china-further-reduces-tariffs-on-australian-wine/

“Regional Australia continues to benefit from higher exports. We’re not going to get rich selling to ourselves. “Mr Clark said while the industry would continue to make inroads in China, it would be difficult to sustain growth forever.

Growing opportunities for family owned labels

Coonawarra winemaker Luke Tocaciu has experienced the benefits and struggles of breaking into a foreign wine market.

As director of a family winemaker business, he said overseas export markets such as China could offer producers significant returns eventually. “We spent a fair bit of time finding the right distributors. For us being represented as a family business was quite important,” he said. “It was about growing into those markets in a sustainable fashion as well.”

His family winemakers, Patrick of Coonawarra, now export two to three times a year into China and the United States. “Export makes up about 20 per cent of our business now, but we’re looking to grow that. Upwards of 50 per cent in the next few years would be fantastic,” Mr Tocaciu said.

“It is hard to get through a lot of that red tape and things like that, but once you’ve done it a few times and learnt the process it is quite easy after that.

“Certainly, every market is very different.”

– Natalie Wang, The drink business

Dated 4th January 2018