When China lifted its punitive tariffs on Australian wine in March 2024, the industry expected a rapid rebound. Nearly two years on, the recovery has been far slower and more complicated than anticipated. Consumption patterns have shifted, business occasions have shrunk, and distributors have grown markedly more cautious. For Australian wine to regain its place on Chinese tables, the path ahead is far from straightforward.
Few understand this better than Stanley Lee, founder and chairman of Mega Wines, one of China’s most recognisable importers of Australian wine. In an interview with Vino Joy News, Lee said the structural transformation underway in China’s wine market is reshaping the entire industry.
“Australian wine returned at a time of economic slowdown and consumption downgrade,” Lee said. “The tariff removal boosted morale, and many companies jumped back into importing. But we’ve been extremely cautious — we never scaled up aggressively.”
What concerns him most is the collapse of traditional wholesale channels and the flattening of the market, which has made life increasingly difficult for distributors and, by extension, importers.
He waited three years for Australia’s return — only to find the market had changed
Founded in 2008, Mega Wines was among China’s earliest specialist importers of Australian wine. At its peak, the company exclusively represented more than 10 wineries — seven of them red five-star estates — with a portfolio of over 200 SKUs.
Its strategy centred around China’s vast traditional distribution network, supported by a “rural encircling the cities” approach. By focusing on western provinces such as Inner Mongolia, Sichuan, Xinjiang and Shaanxi — markets where information spreads more slowly — Mega Wines was able to maintain healthier margins than in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen.
Lee recalls the early days vividly: “Before 2014, most Chinese consumers only knew French wine. Many thought screwcaps meant cheap wine,” he said. Between 2014 and 2018, however, Australia surged past France to become China’s largest source of imported wine. “During those years, I truly felt I was standing at the height of the wind.”
But that success also magnified the impact of the anti-dumping tariffs and the pandemic. Unlike importers who downsized or exited, Mega Wines kept operating through inventory and its whisky business, maintaining relationships with suppliers and waiting for tariffs to lift.
What Lee didn’t anticipate was the extent of the market’s transformation. By the time Australian wine returned, the industry had reset — and his old playbook no longer applied.
Shrinking business occasions reshape the market
“Many parts of the market have fundamentally changed,” Lee said.
Consumption downgrade has depressed one of the industry’s biggest channels — business banqueting. Meanwhile, consumer perception has shifted: wine is no longer seen primarily as a gifting luxury but increasingly as a personal enjoyment purchase. Younger consumers, especially those who studied abroad, are bringing new drinking habits home.
On the surface, the market looks more diverse and arguably healthier. But the contraction of the business channel has been deeply disruptive.
“Many distributors have left the trade. Those who remain don’t want to carry inventory at all. They would rather do presales or order only after selling through,” Lee said. “This disrupts procurement planning for importers and undermines commitments to wineries. It happens constantly now — and it’s a major headache.”
“Many distributors have left the trade. Those who remain don’t want to carry inventory at all. They would rather do presales or order only after selling through,” Lee said. “This disrupts procurement planning for importers and undermines commitments to wineries. It happens constantly now — and it’s a major headache.”
Stanley Lee, Mega Wines
After tariffs were lifted, recovery remained modest. The number of wineries represented by Mega Wines has declined to 10 – including Brokenwood, Credaro, West Cape Howe, Plantagenet Wines, All Saints, Boab Tree, Hobbs of Barossa, Ghinni Gunda, Go Fish, Bethany Wines – and the company is restructuring its distribution model.
Rethinking the business model
Traditional B2B distribution has become fragile, yet pure B2C is also difficult for importers who must fulfil winery sales expectations. Retail margins are higher, but retail volume is too slow to satisfy production commitments.
Mega Wines has shifted to a dual strategy — self-operated e-commerce combined with partnerships with small-scale distributors — and has entered community group-buying and private-domain sales.
Lee sees opportunity there: “Large corporate group-buying is weak, but community and private-domain group buying is still active,” he said. “These smaller groups don’t want low-end wine. They want good value, good stories, and wines without excessive middleman margins.”
He met several promising distributors of this type at this year’s CIIE.
Why Australian wine still has unmatched appeal in China
Despite structural headwinds, Lee remains bullish on Australian wine’s long-term prospects — strengthened by Australia regaining its position as China’s largest import source in 2024.
Australian wine’s advantage, he believes, lies in its accessibility. “You don’t need to know the region. Just open the bottle — the fruit jumps out. It’s easy and enjoyable.”
In training sessions, he uses a metaphor: “French wine is like a mysterious lady — you need time to understand her. Australian wine is like a sunny young woman — you feel her charm immediately.”
During the tariff period, Lee explored Chilean and Argentine alternatives, but consumers and distributors consistently gravitated back to Australia.
The rise of white wine consumption in China has strengthened his conviction. He believes Australia is well positioned to capture this trend, citing Western Australia’s Sauvignon Blanc, King Valley Riesling and Hunter Valley Semillon as examples of internationally competitive wines. One of Mega Wines’ white wines is even used in certification exams, consistently drawing enthusiastic crowds at roadshows.
Comparing origins, he said: “New Zealand makes lovely wine, but the industry is too small. It can’t match Australia for value. And Australian Riesling has lighter kerosene notes than German Riesling — it’s better suited to mainstream consumers and can build a much larger market.”
He believes the sweet spot for Australian white wine in China is RMB 100–150 (US$14.1-21.2), a range chosen by consumers who are knowledgeable and value-driven.
Looking ahead, Lee does not expect rapid improvement. “We already saw some traditional distributors closing or switching industries in 2025. This trend will continue in 2026,” he warned. For Australian wineries hoping to enter China, he stresses three things: self-awareness, planning and patience. “China is one of the most competitive markets in the world — not just for wine, for anything. Chinese people’s hard work and ingenuity are fully displayed here. Any Australian winery or association entering must carefully plan its structure and channel strategy.”
Still, Lee remains confident in the industry’s long arc. “I always believe every industry goes through low points and will eventually enter a new cycle of prosperity. But before that happens, everyone must be prepared.”
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