Australian winemakers look to UK to bolster sales

Adelaide

WHEN it comes to drinking Australian wine, Britons are starting to opt for higher priced options. That's important, as sales to China plunge in the wake of Beijing's trade reprisals.

Once seen as a prime market for cheaper product, the United Kingdom has now surpassed China to become the top destination for higher-end Australian wine, according a report from Wine Australia. The value of exports to the country climbed 7 per cent to A$460 million (S$461.6 million) in the year ended Sep 30, even as shipments by volume declined 2 per cent.

Still, the overall value of Australian wine exports slumped 24 per cent to A$2.3 billion as the industry continues to face a barrage of headwinds, including global shipping delays. The loss of the huge China market in the wake of Beijing's prohibitive duties continued to weigh on the outlook, as exports to the mainland plummeted 77 per cent to A$274 million.

The industry is still reeling following tariffs of more than 200 per cent placed on Australian wine late last year after relations between the nations nosedived. The report shows those tariffs are having a massive impact, with the number of exporters shipping product to mainland China plunging in the period to 750 from 2,241 in the 12 months before.

Despite the tariffs imposed in China's mainland, bumper shipments continued to make their way through to buyers in Hong Kong, where the value of wine exports surged 135 per cent to hit A$207 million, according to the report.

Wine Australia says its exporters are now looking more to the UK to bolster 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 UK, which has led to the market solidifying its place as Australia's number one destination by volume," Wine Australia's general manager of corporate affairs and regulation, Rachel Triggs, said. BLOOMBERG