“Since the imposition of up to 200 per cent tariffs or, more precisely, anti-dumping security deposits, on the import of Australian wine into China, Australian wine imports collapsed,” writes wine columnist RICHARD CALVER.
THIS is the year of the Metal Ox (the Chinese New Year began on February 12). In the Chinese horoscope, the ox is dependable and hard-working, somewhat stolid.
One website concerned with zodiac pontifications tells me that: “This is going to be a year when we will fully feel the weight of our responsibilities, a year when it is necessary to double our efforts to accomplish anything at all.”
It’s as if that prediction were written for the Australian wine industry. The numbers show that since the imposition of up to 200 per cent tariffs or, more precisely, anti-dumping security deposits, on the import of Australian wine into China, Australian wine imports collapsed.
In September and October monthly export figures were $182m and $194m respectively. In December they shrank to $4 million. According to Wine Australia, China was Australia’s largest export market, taking 35 per cent of our exports (if you add in Hong Kong that figure jumps to 40 per cent). In second place is the UK with 16 per cent. The loss of China is a smack in the head to the Australian industry.
That is the crisis. What is the answer?
Well, first it appears that red wine prices and red wine demand is going to be hardest hit.
The Department of Agriculture says: “The average value of Australian red wine exports is expected to fall because high-quality wine formerly expected to be exported to China will be sold into other markets at lower prices. The volume of wine exports is also expected to fall slightly as it is unlikely that all the wine previously expected to be exported to China will be redirected to other markets in the short term. Faced with lower export prices, wineries will likely redirect red wine grapes in the forthcoming vintage into lower-value products and pay lower prices for red wine grapes.”
Strangely, two factors will be present so that white wine prices are not as likely to be affected. The department tells us that prices of white wines are, in fact, likely to rise as stocks fall, partly due to the COVID-19-related distillation of wine stocks into industrial alcohol in Europe and partly because China didn’t take much of our white wine.
So back to the reds. It’s already evident that there are some great deals available. In my email in-box was an offer from Redman’s wines. The vineyard had in 2020 bottled a 2015 Coonawarra shiraz, the Fourth Generation. The vineyard was quite explicit that it has been intended for the Chinese market to oil the wheels of celebration for the Chinese New Year.
As the winemaker Dan Redman said, China’s loss was the Australian consumer’s gain because this terrific wine came on to the market at $12.50 a bottle. I went to make an order to be greeted by the disappointing message that they were already out of stock. Mixed feelings: bravo to this discount offer and the fact that it was snapped up; boo to the fact that I missed out!
Small winemakers are most at risk of going out of business. That is why consumers should actively support small winemakers so that the range and depth of wines available are maintained. Along these lines, I must commend Naked Wines for the launch of its Stop the Squeeze initiative. This is a financial commitment to small winemakers who are much more likely to go to the wall (obviously not the Great Wall) from what is happening.
Naked Wines has undertaken to honour its commitments to small winemakers rather than to switch to larger operators who will be able to offer substantial discounts to move stocks that would otherwise have been sent to China.
The Naked chief (and who wouldn’t want a title like that?) Alicia Kennedy says this about the impact on smaller winemakers: “There is a very real danger that many local winemakers will become collateral damage in this situation. As an industry and as a nation, we need to band together now to ‘Stop the Squeeze’ on Australia’s wonderful community of independent winemakers – a large portion of whom exist in heartland regional Australia.”
Hmmm despite this optimism, I remind myself that oxen are often castrated cattle.