Australia's share of the wine import market in China dropped from 37% in 2019 to just 0.06% last year.

With the thawing of relations between Beijing and Canberra, Australia's bottled wine exports to China skyrocketed in the first nine months of this year, recovering from a near standstill in January, when wine imports totaled just 1 liter, while exports from major European competitors decreased due to transportation issues.

According to the latest customs data, the value of Australian bottled wine imported by China last month surged by 2,952 times compared to September last year (before the removal of punitive tariffs), totaling 3.51 million liters.

In the first nine months of this year, the value of bottled wine imported from Australia by China reached $335.5 million, which is 613 times higher than the same period last year and represents 57% of the total for the first three quarters of 2019.

Australia now holds a 32.32% share of the Chinese wine imports market, making it the second-largest wine supplier to China, only behind France, which has a lead of 1.65 percentage points over Australia.

In March this year, Beijing lifted the punitive tariffs imposed on Australian wine, leading to a rapid increase in wine imports.

In 2020, in response to Canberra's call for an investigation into the origins of COVID-19, Beijing imposed tariffs as high as 218.4% on Australian wine and banned imports of lobster and coal.

As a result, Australia's share of the Chinese wine import market plummeted from 37% in 2019 (when it was the largest supplier) to just 0.06% last year.

Prior to that, since the signing of a free trade agreement in 2015, Australian wine enjoyed zero tariffs in China, providing a significant advantage over many other wine-producing countries, which faced tariffs of 14%.

In the first nine months of 2019, before the pandemic, China imported $589 million worth of wine from Australia. For the entire year, China imported 120.8 million liters of Australian wine valued at $812.2 million.

The Australian government agency, the Australian Wine Authority, attributed the rapid growth in wine exports in the first half of this year to China's removal of import tariffs.

“It is worth noting that the volume shipped in the first six months of this year likely reflects a replenishment after a long period of scarcity for Australian wine. Export levels do not equate to retail levels,” said Peter Bailey, manager of the Australian Wine Authority, on Tuesday.

“It will take some time to see how Chinese consumers respond to the return of Australian wine to the market.”

According to the Australian Wine Authority, the total value of Australian wine exports increased by 34% over the 12 months leading up to September, with export volumes up by 7%.

The demand for wine among Chinese consumers continues to rise, with total wine imports in the first three quarters of this year growing by 31% year-on-year.

However, the Australian Wine Association noted that global wine demand is declining as consumers become more health-conscious and face rising living costs, leading to reduced alcohol consumption.

“Transportation delays and increased shipping costs due to regional conflicts have also made it more challenging for wine exporters to penetrate the market,” the report stated, adding that overall wine exports from Europe are trending downward.

Customs data shows that in the first nine months of this year, wine imports from France to China fell by nearly 10%, imports from Spain declined by 21%, and imports from Italy dropped by 16%.

Following the removal of punitive tariffs on Australian coal and wine this year, China plans to hold talks with Australia at the ASEAN Regional Forum in Laos this month and aims to resume imports of live lobsters from Australia by the end of the year.

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