- When it comes to drinking Australian wines, Brits are now opting for higher priced options. That s important, as China s sales tumble in the wake of Beijing s trade reprisals.
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Once seen as a prime market for cheaper products, the U.K. has now outgrown China to become top destination for higher-end Australian wine, according to a report from Wine Australia. The value of exports to the country climbed 7% to A $460 million $341 million in the year ended Sept. 30, even as shipments by volume declined 2%.
Global shipping impact dropped 24% to A $2.3 billion despite the value of Australian wine exports.
The loss of the huge Chinese market in the wake of Beijing s prohibitive duties continued to weigh on the outlook, as exports to the mainland dropped 77% to A $274 million. The industry is still reeling following tariffs of more than 200% placed on Australian wine late last year after relations between the nations nosedived.
Those move dealt a huge blow to the sector, wiping out demand from what had been the industry s most valuable customer. It left many questioning the future of premium brands, including Treasury Wine Estates Ltd., which earlier counted on China for about 30% of its total earnings.
The report shows those tariffs are having a massive impact with the number of exporters shipping product to mainland China plunging from 2,241 to 750 in the period before 12 months.
Despite the tariffs imposed in Hong Kong, bumper shipments continue to make their way through to buyers in China s mainland, where the value of wine exports surged 135% to hit A $207 million according to the report.
Wine Australia says its exporters are now looking to the U.K. for greater sales, with the coronavirus pandemic and market upheaval amid the Brexit transition also helping to boost demand for Australian products, the report said.
Over the past 18 months, there has been a significant increase in exports to the U.K. which has led to the market solidifying its place as Australia's number one destination by volume, said Wine Australia s general manager for corporate affairs and regulation, Rachel Triggs.
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