03:01
China-Australia relations ‘on the right path’, Xi Jinping tells Anthony Albanese on Beijing visit
China-Australia relations ‘on the right path’, Xi Jinping tells Anthony Albanese on Beijing visit
Trade data showed that Australian winemakers sent almost 2.5 million litres worth US$65.5 million to Hong Kong in December, up from around 685,000 litres a month in recent years and the most since September 2019.
Among those shipping to Hong Kong is DMG Fine Wine, whose brands include Handpicked and House of Arras.
Chief executive William Dong said DMG typically sold one or two containers of wine a year in Hong Kong, but now had 10 in the territory, each containing around 12,000 bottles.
We are getting everything ready to go
Most of the wine is earmarked for China, he said.
“We’re hoping the door to China will open and everything will go in … We are getting everything ready to go,” said Dong.
Hong Kong is a trade hub and potential staging post for deliveries into mainland China. It did not impose tariffs on Australian wine.
The shipments to Hong Kong are far below the roughly 10 million litres of wine a month that Australia sent to China before the tariffs.
The number of shippers was also smaller, with Industry body Wine Australia saying there were 531 exporters to Hong Kong in December, 138 more than a year earlier but less than the 2,366 who exported to mainland China in December 2019.
China’s appetite for wine has fallen in recent years – part of a global trend of declining alcohol consumption compounded in China by a change in preferences towards beer and spirits – and rival exporters such as France and Chile have taken Australia’s share of the market.
The loss of sales to China has contributed to a severe oversupply in Australia, where the amount of wine in storage has risen to more than two billion litres.
But Australian winemakers said they were optimistic that they can become the biggest shipper into China again within a few years.
03:06
Beijing court hands down suspended death sentence to Australian writer Yang Jun for spying
Beijing court hands down suspended death sentence to Australian writer Yang Jun for spying
“Lots of Chinese customers view Australian wine positively,” said Richard Burch, who said his company, Burch Family Wines, had sent around 1,500 bottles to Hong Kong to be used as samples for distributors in China if tariffs are lifted.
While less wine is being sold, Chinese drinkers are moving towards more expensive bottles, preserving margins for winemakers.
The average value of Australian wine sent to China rose from roughly US$4 a litre in 2016 to US$10 in late 2020, and the bottles shipped to Hong Kong in December were worth on average around US$26.50 a litre, customs figures accessed using Trade Data Monitor show.
The value of wine sent to Australia’s two other main export markets, Britain and the United States, is between US$1 and US$3 a litre.
What we plan to ship in this year ahead is sitting in the warehouses here in Australia
The chief executive of Australia’s largest winemaker, Treasury Wine Estates, said China was a “significant growth opportunity” for Treasury’s higher-priced Penfolds wines.
Tim Ford said Treasury had not shipped wine for China to Hong Kong.
Other major producers of wine in Australia including Casella Family Brands, Australian Vintage and Pernod Ricard did not respond to requests for comment.
