A surge of Australia wine exports to Hong Kong has fuelled the city’s bullish wine trade in the first half of the year, as wineries and merchants are itching to ship wines across the border in anticipation of tariff lift.
Hong Kong’s total wine imports from January to June grew by 3% to HK$4.19 billion compared with last year according to government data, and a key driver for the growth was Australia.
During the six months, Australian wine exports including still and sparkling wines surged 34.59% to HK$799.19 million compared with the same period last year, based on government data compiled by us. The growth has expanded its market share to take up now more than 20% of Hong Kong’s imported wine market.
The backdrop to this boom is significant. The Sino-Australian relationship, previously frosty, has shown recent signs of warming. With China’s hefty tariffs disrupting an AU$1.2 billion trade, many are optimistic about a forthcoming reprieve.
The uptick also follows last year’s downturn when some merchants are saddled with overstocks, but imports gained steam this year on news of imminent tariff removal.
Hong Kong with its proximity to mainland China and tax-free policy on wine has thus attracted eager wine exporters who wait with bated breath for the trade green light.
Relations with Australia have shown signs of improvements ever since the election of Anthony Albanese after three years of strained diplomatic freeze. The two countries have since made progress in diplomatic and business dialogues.
Ahead of Australian Prime Minister Anthony Albanese’s much anticipated China trip later this year, he had called for “unimpeded trade” with China, raising hope for Australia’s ailing wine exports, as it remains the only category that has been curbed so far after barley’s tariff lift.
The most recent meeting between Albanese and Chinese premier Li Qiang in Jarkata during ASEAN meetings is a step forward. Furthermore, a high-level business talk between the two countries in Beijing last week with participants from both Australia’s wine associations and leading wineries also spurred speculations of impending trade reset.
Before China imposed up to 218% punitive tariffs on Australian wine in March 2021, Australia was exporting AU$1.2 billion worth of wines to China, its biggest export market. Now its wine trade with China excluding Hong Kong has been reduced to just AU$8.1 million in the year ended in June.
However, some wine industry experts in China cautioned overt optimism, noting that unlike barley, the removal was lifted following Australia’s WTO dispute withdrawal, the dispute over wine is still ongoing with WTO.
Relations between China and Australia worsened after the start of Covid-19. Tensions gradually started to ease after Chinese president Xi Jinping’s meeting with Albanese in Bali last year. China gradually eased trade barriers including those on coal, beef, barley and lobsters. Wine remains the only category that is still blocked from China market.
