Small and big Australian wine brands are gearing up to re-enter the Chinese market, as the five-year-old tariffs are slowly being lifted.
China was once Australia’s biggest wine importer, but then fell dramatically, declining from more than $1.3 billion dollars in revenue to less than ten million in the span of three years by the end of 2023, according to Wine Australia. Though Australian brands were able to recuperate some losses in the UK, Hong Kong and other countries, none quite reached China’s former highs.
The Australian government is optimistic the market can recover. Despite some hesitancy by Australian brands, Prime Minister Anthony Albanese visited the Hunter Valley’s Brokenwood’s cellar door earlier this year and claimed that wine export will soon be back in full force.
Brokenwood Wine CEO Geoff Krieger was also optimistic about their future in China, but said that Brokenwood will remain careful.
“Brokenwood was always reasonably careful about the way we went to market, having five or six different importers, rather than one importer where we put all our eggs in the one basket,” he said in a recent interview with Central News.
“This time we’ll also make sure that the importers that we do select will be larger, more experienced players,” he said.
China had been “a reasonable important customer”, once making up half of Brokenwood’s export revenue, he said.
“They were importing to different regions throughout the country, including supermarkets and high-end restaurants and everywhere in between,” he said.
Brokenwood’s Hunter Valley cellar door. Photo: Charlotte Blackley.
Some smaller wineries and vineyards may not have been as severely affected due to their smaller presence in exports, but still found the tariffs distressing.
Tulloch Wines new market manager, Justina Tulloch, said though they are “smaller exporters”, China was still “their biggest export market”.
“It wasn’t great, but it wasn’t devastating to us as a company,” she said.
Tulloch said with exports minimal pre-tariffs, venturing to China, hopefully this year, was more seen an exciting new chapter.
“I’ve stayed in contact with that export partner of ours over there and we were both as keen as each other obviously for the tariffs to be dropped,” she said.
Tulloch Wine’s Hunter Valley cellar door. Photo: Charlotte Blackley.
Winemakers agree they are keen to grow again overseas, but is not dependent on its success.
Krieger said he sees Brokenwood’s future as “very much growing consensually from our base outwards”.
“But we still want an international brand so it’s important that we spend at least 20 per cent of our time building export market,” he said.
Australia’s wine market will also still face other new challenges, according to research by Wine Australia, as new mandatory bureaucratic paperwork is replacing the tariffs causing new arduous responsibilities.
Tulloch agreed she has been getting reports from other wine companies, already sending orders to China, that the process is laborious.
“The smallest little problem with your label or with some of your documentation, they’ll just reject the shipment,” she said.
RELIANCE ON DOMESTIC MARKET
Wine makers noted they have learned from past challenges, too. After losing China, they said it wasn’t as simple as pivoting to India or America back in the middle of the global pandemic.
Instead, amid the lack of exports, both Brokenwood and Tulloch said the domestic market sector thrived.
Geoff Krieger said that focusing on the domestic market was also cost effective, with loyalty programs also playing a vital part.
“We really see most of our emphasis being built on working with consumers that we think probably aren’t going to go away,” he said.
He goes on to mention wine club memberships mean there is less reliance on exports.
“When we sell direct to a consumer, we’re keeping a much higher percentage of the pie”, he said, adding therefore Brokenwood could “afford to spend a lot more money on recruiting local consumers than we can on developing export markets”.
Inside Brokenwood’s Hunter Valley cellar door. Photo: Charlotte Blackley.
Local wine consumer opinions corroborate the passion for the domestic market, finding that the talent Australians bring to innovating and creating wine is invaluable.
One wine-sipping consumer recently commented that the ability to enjoy locally produced products should not be taken for granted: “I think Australian produce should be cherished and valued”.
Main image by Charlotte Blackley.
*The Constructive Journalism in Communities (CJIC) project has been made possible by the philanthropic support of AGL for regional communities. UTS has maintained full editorial control and independent journalistic standards.
