Australian wine exports to China soar

By Dominique Patton

- Last updated on GMT

Related tags Wine International trade China

Volumes of Australian wine exported to China grew almost 350 per
cent last year, making it an increasingly important market for wine

The Australian Wine and Brandy Corporation (AWBC) says the country, which has only started consuming wine in recent years, is now its tenth largest export market in volume terms.

It bought 8 million litres of Australian wine during the 12 months to April 2006, with bulk red wine accounting for three quarters of the increase in sales.

The volumes are still significantly lower than those imported from Chile and Spain, both responsible for a significant share of the total 40 million litres of bulk sent to China in the last year.

Imports of wine have surged since 2004 when Chinese import duties dropped from 65 per cent to just 14 per cent as a result of its accession to the WTO.

But much of the bulk wine is being bought by domestic wine producers who blend the beverage with their own wines.

"The imported bulk tends to be better quality than a similarly priced Chinese wine,"​ said Carl Crook, managing director of Montrose China, one of the countries longest established wine importers.

"The big brand names are buying it to improve the quality of their own product,"​ he told

It is thought that producing wine in China is still more costly than more established wine growing nations.

China's ministry of commerce expects domestic wine production to increase by 15 per cent each year until 2010, when volumes will reach 800,000 tonnes but imports are also likely to continue growing as the prices continue on a downward trend that could soon meet the prices of Chinese producers.

Crook added that imports are not the same thing as sales.

"We've seen a flurry of distributors opening up and making a lot of orders but they could just be sitting in inventory,"​ he said.

Ali Hogarth, responsible for developing emerging markets for the AWBC, says that the tariff change has undoubtedly boosted imports but there are other factors benefiting imported wines.

"The government has been encouraging the drinking of grape wine after a bad year of grain-based alcohol, even offering wine at banquets instead of the grain variant,"​ she said.

"We're also seeing high-priced premium wines benefiting from the awareness of wine's health benefits in China,"​ she said.

She added that Australian producers are highly regarded in the Chinese market, with a reputation for a good grape-growing environment.

More than half of all China's wine sales still come from three domestic companies (Great Wall, Dynasty and Chang Yu).

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