Penfolds grange (pic: penfolds)
Australia Wine

Liv-Ex: Australian trade shrinks after Chinese tariffs

Secondary market activity for Australian wine experienced significant decline as a result of Chinese anti-dumping tariffs, as reported by Liv-Ex.

Secondary market activity for Australian wine experienced significant decline as a result of Chinese anti-dumping tariffs, as reported by Liv-Ex. The country’s leading label, Penfolds Grange, lost its luster by falling into the 45th place from fifth in the latest Power 100 rankings.

Before the tariffs, China was Australia’s largest market by value and the second-largest in volume in 2020, according to an Australian government report

After China’s formal implementation of up to 218% punitive tariffs on Australian wine imports, the number of Australian wines traded declined 32.2% year-on-year, Liv-ex revealed. 

penfolds logo (pic: file image)
Penfolds (pic: file image)

Meanwhile, Australia’s trade share of the total market shrank from 1.6% in 2020 to 1.1% by value in 2021.

Despite the adversity, Australia remains the leading country in the ‘Rest of the World’ (RoW) category on the secondary market. In 2021, it accounted for 36.2% of RoW’s trade, in comparison with Spain’s 26.1%, Germany’s 16.5% and the UK’s 7.8%.

“Rest of the World” category also assesses regions including China, Australia, Chile, Lebanon, Argentina, South Africa, Switzerland and Austria. These are regions that are not covered in other Liv-ex’s key regional indices i.e. Liv-ex Bordeaux 500, Burgundy 150 and Italy 100. 

“However, as more new countries enter the secondary market, Australia will face even stronger competition within the RoW category.” Liv-ex forecasted.

Among the Australian wine brands, the iconic Penfolds Grange suffered a drastic drop in the Power 100 rankings, from fifth to 45th place in 2021. 

In spite of the continual challenges faced in China’s market, Penfold’s 2016 vintage became the most traded Australian wine by value in 2021, which is currently priced at £4,140 (US$5,628) per case (12×750ml). Its 2007 vintage also led the price performance of Penfolds Grange with a 17.1% increase.

In contrast with Penfold’s falling rank, other Australian labels including Torbreck, Clarendon Hills and Henschke rose in the 2021 Power 100 rankings with their growing trades.Notably, the rising demand towards Hill of Grace by Henschke has made it the second most-traded Australian label last November. According to wine-searcher.com, the current average price for a bottle of Henschke Hill of Grace Shiraz is HKD 5,711 (US$733).

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