Chile and China flag together realtions textile cloth fabric texture (pic: iStock)

Chile and China flag together realtions textile cloth fabric texture (pic: iStock)

Chile is reaping in market share left by Australian wines, which topped China's wine market up till last November when crippling tariffs brought it to a crashing halt.

China’s punitive tariffs on Australian wines of up to 218% have wiped out Australian exporters but edged up Chilean wineries, as the South American country reports surging exports to China, its current biggest export market by value.

Chile, China’s second biggest wine exporter behind France, is reaping in market share left by Australian wines, which topped China’s wine market up till last November when crippling tariffs brought it to a crashing halt.

“Chilean wineries are taking advantage of the space that has been left in the market,” says Nicolai Samsing, Wines of Chile’s Asia Director when asked by Vino Joy News about the country’s fast rise in China.

From last December to March this year, within just four months, Australian wine exports, were reduced to just AU$12 million compared to AU$325 million for the same period over a year ago.

Chile’s pavilion at this year’s China Food and Drinks Fair in Chengdu (pic: Wines of Chile WeChat)

Chile, on the contrary, in the first four months of the year reported double-digit growth both in volume and value. According to Wines of Chile, its wine shipment to China grew by 43% in value to US$79.7 million and 39% in volume to 21.2 million liters.

The growth is recorded at a time when China’s overall imports are slipping on weaker demand, which suggests that wine merchants are bullish on stocking on Chilean wines on anticipated sales pick-up in later half of the year.

Samsing added that Chile’s growth is also aided by what he describes as Chilean wine’s premiumization.

“Especially in the premium wine category, where growth has been remarkable. The first months of this year all the top Chilean wineries grew in average price vs 2020 and 2019,” he explained when asked by Vino Joy News about the increases.

The country’s top five wine exporters to China are Concha y Toro, Vina Futaleufu, Survalles, DBR Lafite-owned Los Vascos and Montes, with Montes topping the highest average price per 9 liter at US$105.3.

Concha y Toro, owner of volume-driven brands Casillero del Diablo and Marques de Casa Concha and its top end Don Melchor, exported over US$7.2 million worth of wines to China in the first four months of the year, up from US$ 5.3 million a year ago.

“This has increased the total average price of our exports and we expect the trend to continue to rise during the years to come,” he added. “Many Chilean wineries have adopted a ‘premiumization’ and brand-building strategy several years ago that is yielding incredibly good results.”

Visitors at Chengdu wine fair

Additionally, China and Chile’s stable political and economic relations also contributed to Chile’s rise in the market. Chile is the first Latin American country to establish diplomatic relations with China back in 1970.

In 2005, the two countries signed a Free Trade Agreement and since then China has gradually cut import tariffs on Chilean wines and completely scrapped it for both bottled and bulk wines in 2015.

“Chile has certain key advantages such as the free trade agreement between both countries, which is quite active and was positively updated in 2019,” he added. The upgraded China-Chile FTA will see the number of items exempt from tariffs increase to cover up to 98% of all items.

Riding on the growth momentum, the wine trade association has launched a series of promotional activities in China this year and brought 13 wineries to China Food and Drinks Fair (Chengdu)  in April.

Chile’s bulk wine exports to China also grew by 45.5% and 40.4% in volume and value respectively, but it lags behind its top destinations – the US and UK.

Leave a Reply

%d bloggers like this: