Australia wine finds niche in Hong Kong
by Bloomberg
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Wine barrels and pallets of bottles stacked at a winery in the Yarra Valley, Victoria, Australia, on Dec. 7, 2020. MUST CREDIT: Bloomberg photo by James Bugg.
Australian wine companies may have hit a big roadblock in getting bottles to China because of sky-high tariffs, but the road to Hong Kong appears to be wide open.
Shipments to the city rocketed 111% in the 12 months ending June 30, to $136.7 million, according to the latest data from Wine Australia. That compares with a steep 45% drop in exports to mainland China.
The Hong Kong market still pales in comparison to the mainland, and China remains the largest wine market for Australia by value. But Hong Kong has now jumped to the No. 4 position, up three spots from a year earlier.
Australian winemakers have increased exports to new and current markets but have been unable to offset a major decline in sales to mainland China, a report says.
The trade dispute between Canberra and Beijing was the main driver behind a 10 per cent drop in Australia s total wine exports to $2.56 billion during the 2020 to 2021 financial year, data by industry body Wine Australia shows.
The total value of exports to mainland China fell by 33 per cent over the past 12 months.
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Australian wine producers are finding new export markets for their produce.(Getty Images/iStockphoto)
Australian wine exports to China were hit with tariffs of more than 200 per cent earlier this year.
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Australian wine exports during 2020–21 declined by 10 per cent in value to $2.56 billion, compared with the previous financial year, while export volume declined by 5% to 695 million litres (77 million 9-litre case equivalents), according to Wine Australia’s latest Export Report.
The average price per litre for wine exports declined by 5% to $3.69 free on board (FOB).
Wine Australia general manager corporate affairs and regulation Rachel Triggs said the key factors in the declines were the downturn in exports to mainland China following the imposition of tariffs and the cumulative effects of three consecutive lower vintages in 2018, 2019 and 2020 which meant there was less wine available to export.
Wine sales to China crash on tariff hit
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Australia’s wine exports to China plunged to just $13 million in the six months ended June 30 compared with $490 million a year earlier as the full impact of the punishing wine tariffs imposed by Beijing washed through.
Wine Australia announced on Wednesday that total wine exports from Australia for the 12 months of 2020-21 dropped by 10 per cent to $2.56 billion as the hit from China tariffs dragged exports lower, even though a healthy rise in sales to the United Kingdom partially offset the fall.
It gave extra details on the China tariff hit which has decimated exports to what was Australia’s most lucrative export market and an important profit centre for Penfolds owner Treasury Wine Estates, the ASX-listed wine giant that paved the way in building up the China market for premium wine.