Australian wine exports plunge after Chinese tariffs

Imports and Exports | | MIC Customs Solutions |

The Australian wine sector has reported a drop in exports for 2022, with tariffs in China and changing market conditions in Europe among the key contributors.

Stiff tariffs imposed by China on imports of Australian wine have contributed to a major decline in overall exports from Australia, with the sector also struggling with exports to other leading markets.

New figures from industry body Wine Australia revealed that in 2022, overall exports fell by four percent in value to a total of $1.94 billion. This was despite the volume of exports actually increasing by one percent. 

The Australian Financial Review noted trade with China has fallen from $1.3 billion at its peak to just $12.4 million. Australian imports to China are currently subject to tariffs ranging from 116 percent to 218 percent, with the biggest importers paying 176 percent duties to bring their goods into the country.

As a result, Wine Australia also noted that the number of companies exporting to China has dropped from 2,366 in 2019 to just 114 today.

However, the sector has been making efforts to diversify its trade over the last two years, with the nation's biggest exporter, Treasury Wine Estates, increasing shipments to other Asian destinations including Malaysia, Thailand and Vietnam. It has also started selling a Chinese-made version of its Penfolds brand, using grapes from the Ningxia region.

Overall, growth in the value of exports to Southeast Asia increased by 16 percent in 2022 to $305 million. 

Elsewhere, exports to the UK - the country's second-biggest market for wine - also fell by 18 percent to $373 million.

Manager, market insights at Wine Australia Peter Bailey said: "This drop was anticipated, as Australia experienced two years of elevated shipments as a result of Brexit deadlines and increased demand for wine in the off-trade (supermarkets and bottle shops) during the COVID-19 pandemic when many on-trade businesses were closed." 

However, similar weak performance was seen throughout Europe, with nearly every European destination declining during 2022, resulting in a total fall of 16 percent to $586 million.

Other contributors besides the UK included Germany (down 22 percent in value to $38 million), the Netherlands (down 19 percent to $29 million) and Denmark (down 13 percent to $37 million).