Australia Bounces Back As China’s Biggest Wine Supplier, But Worries Deepen

Australian wine imports surged in June, reclaiming its position as China’s top wine supplier for the first time since 2020, according to data released by Chinese customs. The data highlights a significant shift in the wine import market, with traditional suppliers such as France, Chile, Italy, and Spain seeing continued declines.

Australian Wine Imports Skyrocket

In the first half of 2024, the import volume and value of Australian bottled wine (2L and below) increased by an astonishing 7172.95% and 35956.87%, respectively. This surge contributed significantly to the overall growth in China’s wine imports, lifting its total import value to US$711.45 million for the first six months of the year.

In June alone, Australian bottled wine imports reached 4.89 million liters, valued at US$103 million, compared to zero imports in the same period last year. The average price of Australian bottled wine was the highest among the top 10 sources, at $22.45 per liter from January to June, indicating a substantial influx of high-value wines.

Penfolds Leading the Charge

Driving the imports, Penfolds, the most well-known wine brand in the Chinese market, played a significant role. A Penfolds China agent, who wished to remain anonymous, noted: “After the resumption of Australian wine imports, everyone considered which wines would sell well, and the first choices were Penfolds and Yellow Tail. In terms of high-value goods, it’s definitely Penfolds.”

Ge Zhengbo, General Manager of the wine supply chain company Ningbo Yunhaifangzhou Supply Chain Management Co., agreed on Penfolds’ role in leading the charge: “The current import of Australian wine is primarily driven by Penfolds, although other Australian wines are also present, but their volume is far less than that of Penfolds.”

Ge Zhengbo pointed out: “Given the current poor economic environment, many wines are struggling to sell, but Penfolds is the only brand well-known to consumers and has brand management, so everyone is willing to stock it.”

In stark contrast to Australian wines, other mainstream wine suppliers like France, Chile, Italy, and Spain saw double-digit declines in both import volume and value year-over-year. France, which ranked first in terms of value for several years, experienced a nearly 50% drop in import volume in June compared to the same month last year.

Vino Joy News observed that June 2023 had the highest import volume for French bottled wine, which directly led to this year’s poor figures. Speaking to Vino Joy News, Fine West CEO Wu Xianghua, one of China’s Top 50 Wine Importers, explained: “June is not a peak month for Bordeaux wine deliveries. Last year’s high import volume in June might have been due to many Chinese wine merchants performing well in the first half of 2023 and increasing their stock to prepare for the Mid-Autumn Festival peak season.”

‘2024 Is My Worst Year in 11 Years’

Despite the spikes in Australian wine and lift of overall imports, major importers are cautious about the outlook for 2024. A senior executive at Zhejiang Jinyu Group, one of China’s Top 50 Wine Importers, who wished to remain anonymous, warned of overall weak consumption sentiment, describing the year as the worst in his professional career.

“The recovery of Australian wine from zero to a significant increase is normal. The decline in wine imports from other sources is solely due to a poor market. 2024 is my worst year in 11 years in the industry, and the performance of my peers is also declining,” he explained.

It’s worthy to note high imports do not necessarily translate to sales and depletion. As we have reported that despite Penfolds’ popularity and renown, several importers we have interviewed spoke of its sluggish sales.

US and New Zealand Wine Imports Also Grow

Besides Australia, the import volume and value of US bottled wine also increased. In particular, June saw a 390.48% increase in import value, surpassing Italy to become China’s fourth-largest source of bottled wine. This reflects the strong vitality of high-end US wines, despite higher tariffs due to the US-China trade war.

Additionally, after declines in April and May, New Zealand bottled wine returned to a growth trajectory in June, indicating the sustainable sales potential of white wine in China.