Is China the Next Big Thing to Happen for Australian Wine?

Is China the Next Big Thing to Happen for Australian Wine?

Just as the US emerged as a major export market for Australian wine some decades back which opened up plethora opportunities of revenue generation for winemakers, China is set to tilt the scales in its favour within a few years. Going by the trends of wine consumption in China, exports sales statistics of Australian wines […]

Just as the US emerged as a major export market for Australian wine some decades back which opened up plethora opportunities of revenue generation for winemakers, China is set to tilt the scales in its favour within a few years. Going by the trends of wine consumption in China, exports sales statistics of Australian wines to China last year and the expectations for future, there is no denying the fact that the gap is closing fast and Mainland China will pip the US as the largest export market for Australian wines by 2017. Along with Hong Kong, it has already overtaken the US market for export growth.

Chinese have high appreciation for good wines from Australia. With robust middle-class buying of wine, the demand has increased many folds in the last few years. This has helped in the growth of export revenues by approximately 50 percent to $419 million in the 2015-16 period to Mainland China. The trends show that the average per litre sale was of $9. Another interesting trend is of wines priced AUD 10 or more making up almost half of total growth in value.

While the general high demand for Aussie wines has grown in China, this has also been bolstered by free trade agreement signed between the two countries. Another important factor which has helped in improved performance of Australian wines is the weak harvest in Chile and Argentina and the shift of focus of Australian wine producers to premium wines.

The government of Australia is set to reduce the rebate on wine equalisation tax which was allowed to wine-producers. Tightening of the eligibility criteria for availing the rebate will also help in ensuring that only the small growers remain eligible for this rebate and the mass producers are not able to derive benefit from it.

Chinese largest online retailer, Alibaba, has also invested in online sale of Australian wine. Consumers will now be able to buy wine online on its e-store. This will further boost up the sales of wines from Australia.

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