Wine exports smash records on the back of surging China demand

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Hunter Valley winemaker Mark Davidson has witnessed Chinese consumers’ enthusiasm for Australian wine first hand at his cellar door.

Over the past five years, the number of Chinese visitors to Tamburlaine Organic Wines, where Mr Davidson is managing director, has increased dramatically.

“When they think of wine they think of Australia,” he said.

Today, Chinese tourists are the No.1 foreign visitor to Tamburlaine and one of the key questions they ask is: “How can I get these wines in China?”

Fortunately for them, the company’s wines are available in China; last financial year, Tamburlaine’s wine exports to China nearly doubled.

And the experience of Mr Davidson and his business – which has at times used Chinese social media “influencers” to spread the word about Tamburlaine – is being repeated at cellar doors across Australia.

The Australian wine industry is riding a wave of demand from China as its middle class grows and incomes rise. A report from industry body Wine Australia released on Tuesday shows total wine exports jumped 20 per cent to $2.76 billion in fiscal 2018 – the highest rate of growth in 15 years.

“When they think of wine they think of Australia.”Mark Davidson, Tamburlaine managing director

By value, exports of Australian wine to China (including Hong Kong and Macau) jumped 55 per cent to $1.12 billion for the year. This was well ahead of sales to the No.2 export market, the United States, at $424 million.

By volume, Australian wine exports grew 10 per cent to a record 852 million litres, while the average value of bottled exports hit a record $5.94 a litre. The total exports value figure, at $2.76 billion, was the third best on record.

“It’s a great result overall. That 20 per cent value increase is the highest rate of growth in 15 years,” Wine Australia chief executive Andreas Clark said.

The report also revealed strong increases in sales to other markets. Sales to the UK rose 12 per cent to $384 million, while exports to Canada grew 7 per cent to $199 million and New Zealand sales were up 17 per cent to $88 million.

“Undoubtedly, the headline number is what’s happening in China. On the value perspective you see that strong growth rate of 55 per cent into China, Hong Kong and Macau. And that, year-on-year, has been really consistent,” he said.

Mr Clark was speaking from America, where he was attending a four-day event promoting Australian wines called Australia Decanted. Australian wine exports to the US dropped 8 per cent in fiscal 2018 to $424 million, while export volume fell 11 per cent.

Mr Clark said the Australian industry wanted a range of export markets and there was an opportunity to expand exports to the US. The premium end of the US wine market was growing and the US was the biggest wine market in the world, he said.

Shares in Australia’s biggest wine company, Treasury Wine Estates, jumped 5.5 per cent in the wake of the export data.

The assistant minister for agriculture, Anne Ruston, said Australian wine regions were “benefiting from growing export opportunities. They are a win for the wine industry and a win for regional Australia”.

By Darren Gray
SMH

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