Exporting Australian Wine – Why China is the no. 1 Destination!

Australian winemakers are buoyant as a result of recent sales reaching record growth numbers. This comes as a great reward for the industry who last experienced such a trend back in 2004.The value of wine exports has increased by 15 per cent in the past year to $2.56 billion, and it was also a record year for volume, increasing 8 per cent to 811 million litres.

But the report is not all good news, reflecting shrinkage in some markets, including reduction in the value of Australian wine exports to the United Kingdom and the United States and Canada. Although the wine market in the UK was starting to settle down since Brexit, there is still an element of uncertainty looming around the impact of these changes.

The saving grace for Australian wine businesses is China’s insatiable appetite for foreign goods, especially imported wine from Australia. Sales numbers have hit $848 million for the year, more than doubling since the free trade agreement between Australia and China was in effect.

Australia’s annual wine exports to China experienced a 63 percent increase than that of the recorded numbers in 2017. The fastest-growing segment of the export market was for expensive wine valued at $200 per bottle. The rise also helped Australia boost its total wine shipments to their highest in a decade last year.

These are important numbers for an economy trying to transition away from exports revolving around mining and agriculture. Unlike a tonne of wheat or iron ore, the value of a case of wine can rise much higher than that of in the commodity markets.

China: A challenging but potentially lucrative market

The Chinese market is a whole different ball game compared to most countries in the world.Firstly, the Chinese do not have an established wine culture rather it is more in the lines of gifting and celebrating special occasions. However, As a result of the Chinese consumers not trusting their domestic alternatives and demanding the overseas alternatives that grant them prestige, foreign wine is flourishing.

Another challenge is the lack of wine knowledge due to its absence in their culture. The Chinese pride themselves on having a rich culture and tradition, however, it is only relatively recently that the general population have acquired a taste for wine. This can be the factor as to why many of the consumers have very limited wine knowledge. In many ways, this presents a huge opportunity for foreign wines, including Australian wines, to carve out their own place in modern Chinese society and culture.

From an economic perspective, the rise of middle class income in China along with more exposure to the western lifestyle has been instrumental in bolstering the country’s insatiable import appetite. More families than ever before have greater disposable income and are not shy in splurging on high quality and expensive imports. A lack of trust for homegrown products has also made life easier for exporters across the world. These are all key factors driving the huge growth of Australian wine consumption in China.

As a result of a different language, cultural barriers and an excess of red tape China has a reputation of being a tough market to break into. Without having the appropriate connections and performing the necessary due diligence there is a potential for failure. In light of this, it is highly advised to find guidance from businesses that can offer you export business solutions and services to ease the transition and expansion. At Ausmate we specialise in doing just that and can help you establish your business in China as well as expanding your clientele across the most exciting country in Asia.

For further more information about anything China or any queries you may have, visit our website