UK Top Destination For Australian Wine Exports After Chinese Tariff Hike

With crippling additional import duties imposed on Australian wine in China, wine makers in Australia had been trying out new markets and one of the successful markets was that of the United Kingdom.  

Last year there was 30 per cent growth in the sale of Australian wine in the country.  

Exports of Australian wine to Europe reached a 10-year high last year and the UK has been the primary target of Australian wine makers.

In November last year, a 212 per cent hike in import duties on Australian wine was imposed by China after a trade spat with Australia which also saw China hitting out on other Australian products such as lobsters and coal.

The Covid-19 induced lockdowns and Brexit helped the surge in Australian wine sale in the UK, said Wine Australia.

According to government figures, there was a 22 per cent jump last year in the value of wine exports to Europe and there was a 29 per cent growth in the UK market only which made it the “standout performer”.

There was an increase in demand for its wines at the beginning of the novel coronavirus pandemic and the demand continued to increase till the imposition of Brecit, said Wine Australia, a government organisation set up to promote and regulate the wine industry of the country.

The significant growth in export and sales to European consumers helped the Australian wine industry to offset a sharp decline in exports to China during the last two months of 2020 because of the increased import tariffs. For the entire 2020 however, there was just a 1 per cent decline in Australian wine exports to China in terms of value since the higher tariffs were imposed by Chinese authorities only towards the end of the year.

With a total of 39 per cent of the total exports, China was the largest export market for Australian wine during the first nine months of last year.

But with Brits buying up 266 million litres (29.6 million cases) of Australian wine in 2020, the biggest destination for Australian wine exports currently is the UK. The shiraz/syrah brand which accounted for 29 per cent of UK sales last year was the most popular wine varieties followed by chardonnay (25 per cent) and cabernet sauvignon (10 per cent).

“Due to the Covid lockdown they are not drinking wines in restaurants and cafes… but instead buying retail. Australian wines have sold extremely well in UK retail for decades,” a Wine Australia spokesman told the media.

The tensions between Australia and China began with a political disagreement and later spilled over into trade.

There have been allegations made by officials in China that Australian wine was being sold cheaper in the Chinese market compared to the price of the same products in its home market through the use of subsidies, resulting in dumping. Australia has rejected the allegations.

“The Australian government categorically rejects any allegation that our wine producers are dumping product into China,” Australia’s agriculture minister David Littleproud said in November.

“Australian wine is hugely popular both in China and across the globe due to its high quality and we are confident that a full and thorough investigation will confirm this.”

(Adapted from BBC.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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