Australia's Wine Exports To China Increased Nearly 100 Times in The First Half of 2024

On July 30, the Australian Wine Association released the global export data of Australian wine from April to June, showing that: driven by the strong export to the Chinese mainland market, the total global export volume of Australian wine in the first half of the year increased by 33% year-on-year to 1.183 billion Australian dollars. At the same time, the export volume to mainland China increased by nearly 100 times, reaching 394 million Australian dollars, accounting for one-third of the total export volume, quickly climbing to the first place in terms of export value, and the export volume also climbed to the fourth place. Judging from the second quarter data alone, the export volume to mainland China has exceeded the total of the thirteen export destinations ranked behind.

1. The total global export volume increased significantly, but other regions in the world except mainland China declined overall

According to the global export data in the first half of the year, the total export volume of Australian wine was 304,700 kiloliters, and the total export volume was 1.183 billion Australian dollars, with a year-on-year increase of 4.3% and 33% respectively. The average export price was 3.88 Australian dollars per liter (about 18.5 yuan per liter), a year-on-year increase of 27.5%, indicating that the increase in total exports was not only due to the reopening of the Chinese mainland market, but also the increase in the caverage export price was an important factor.

The top five export destinations in terms of export volume are: Mainland China, the United Kingdom, the United States, Hong Kong, China, and Canada, accounting for nearly 70% of the total export volume, of which Mainland China, which ranks first, accounts for 33%; and the top five export destinations in terms of export volume are: the United Kingdom, the United States, Canada, Mainland China, and New Zealand, accounting for nearly 76% of the total export volume, of which Mainland China accounts for more than 10%.

However, from the specific data, except for Mainland China, the overall export volume and volume of Australian wine to other parts of the world (excluding Mainland China) have declined to a certain extent, and Singapore and Hong Kong, China, which are closely connected with the Mainland China market, have also experienced a significant double-digit decline.

In this regard, a senior industry insider believes that judging from the export situation of Australian wine in the first half of the year, the growth is not universal, and there is also obvious squeezed growth within it.

Peter Bailey, Australian wine market research manager, also said: "The global trade environment remains very challenging. Due to the slowdown trend and cost of living pressure, wine consumption in many markets around the world continues to decline. There are also persistent problems in the shipping industry, with a global shortage of ships and rising freight and charter rates."

2. In the second quarter, the export volume and value to mainland China increased by 144 times and 188 times respectively, but it has not yet penetrated into the terminal first-tier market.

Judging from the export data in the second quarter alone, Australian wine exports are particularly affected by the Chinese mainland market. Since the Chinese government officially cancelled the "double anti-dumping" on Australian wine at the end of March, the volume and value of exports to the Chinese mainland market have begun to surge.

In the second quarter from April to June, the export volume to the Chinese mainland was 30,700 kiloliters, and the export value was 389 million Australian dollars (about 1.85 billion yuan), an increase of 144 times and 188 times year-on-year respectively. The export volume ranked second after the United Kingdom, and the export value ranked first, and exceeded the total export value of the 13 countries ranked last. The average export price to the Chinese mainland was 12.68 Australian dollars per liter (about 60 yuan per liter), an increase of 30.1% year-on-year.

Specifically, unlike other major export destinations, Australian wine exported to the Chinese mainland market is mainly red wine, with an export value of 384 million Australian dollars (about 1.827 billion yuan), accounting for 98.65%, and the volume accounted for 96.42%. From the perspective of the red wine category alone, both the volume and value have ranked first.

Other major export markets all experienced varying degrees of decline in the second quarter.

Although exports to the Chinese mainland market reached a peak in the second quarter and led to a significant increase in the total export volume, Australian wine still faces uncertainty in the entire global market.

Peter Bailey believes: "Although these figures are very positive, they represent the restocking of Australian wine in one of the major markets after a long absence, which does not necessarily mean the recovery of terminal sales. It will take some time to get a clearer understanding of how Chinese consumers respond to the increase in the supply of Australian wine in the market. Both domestic and imported wine consumption in mainland China is less than one-third of that six years ago, so Australian wine exports are unlikely to return to their previous peak in the short to medium term."

In this regard, WBO has also clearly felt in recent exchanges with many mainland Chinese distributors: From the perspective of channel distributors, they are still generally watching the market trends of Australian wine and the entire wine market, and are not eager to invest in active stocking. At the same time, they are also paying attention to the sales atmosphere of the entire terminal market, especially the market situation in the upcoming traditional peak season of "Golden September and Silver October".

As one distributor told WBO: "In the current market environment, most distributors are reluctant to act as 'guinea pigs' and rashly invest large sums of money to stock up on Australian wine. Most are watching the sales at the terminal and will only be willing to increase market investment in Australian wine when there are clear signs of improvement. Therefore, at present, the return of Australian wine to the Chinese market is still mostly at the import level."

At present, the demand for Australian wine in the Chinese market is increasing significantly, and it is mainly mid-to-high-end products, with products with an average price of AUD 300/L and above accounting for nearly 10%.

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