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Australian wine exports clipped by China tariffs

Australian wine exports slowed in the 12 months to December 2020, significantly clipped by China's punitive tariffs in the last two months of the year that nearly flatlined December exports, according to Wine Australia’s latest Export Report released today.

Australian wine exports slowed in the 12 months to December 2020, significantly clipped by China’s punitive tariffs in the last two months of the year that nearly flatlined December exports, according to Wine Australia’s latest Export Report released today.

Wine Australia Chief Executive Officer Andreas Clark said that despite the COVID-19 pandemic, exports hit a record year-on-year value of AU$3.1 billion in the 12 months ended October 2020, before recording a steep decline in the final two months of the calendar year.

According to the graph (see below) released by Wine Australia, wine exports to China surged in September and October, as merchants scrambled to stockpile Australian wines.

Australian wine exports to China by month in 2020 (pic: Wine Australia)

China announced first round of anti-dumping tariff up to 212.1% on Australian wines in November, followed by another anti-subsidy tariff up to 6.4% in December. Exports as a result plunged, as the graph shows December exports to China almost ground to a halt.

The sharp decline in export volumes and value in the final two months of the year saw the overall value for 2020 decline by 14% to $1.01 billion and volume drop by 29% to 96 million litres (10.7 million 9-litre case equivalents).

China, for now still ranks as Australia’s biggest export market at AU$1.15 billion, more than twice the size of Australian wine exports to its second biggest market, the UK, at AU$456 million. This will likely change in 2021. It was expected that exports to China would remain low in coming months affecting total export numbers during 2021, says Clark.

Australian wine exports in 2020 (pic: Wine Australia)

However, Clark said the decline in exports to China had been offset by significant growth in exports to Europe, up 22% to AU$704 million – the highest value in a decade. There was also growth in North America, up 4% to AU$628 million, and Oceania, up 11% to $115 million.

‘Wine businesses are resilient and are already adapting to these changed market conditions, increasing their engagement in markets other than China, particularly the UK, US, Canada and the domestic market’, he said.

Interesting, Australian wine exports to tax-free Hong Kong rose by 27% during the year to AU$132 million, as wineries shift focus from the mainland to the SAR.

The top five export markets for Australian wines in 2020:

  • Mainland China, down 14% to $1.01 billion
  • United Kingdom (UK), up 29% to $456 million
  • United States of America (USA), up 4% to $434 million
  • Canada, up 5 per cent to $192 million, and
  • Hong Kong, up 27 per cent to $132 million.

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