RABOBANK: AUSTRALIA “CLEAR WINNER” IN CHINESE WINE MARKET AMID TRADE WAR
By Siulan Law Mathews DipWSET
The Australian wine industry has emerged to be the “clear winner” in the Chinese wine market amid an ongoing USA-China trade war, according to a report released by Netherlands-based food and agriculture lender Rabobank.
In their latest quarterly update, Rabobank said the trade war between USA and China has helped Australia overtake France in the enormous Chinese market, at a time when French producers are dealing with a very bad 2017 harvest.
The report said USA wine exports to China fell almost 60 per cent in value in the first four months of 2019, creating a gap that helped Australian producers.
The report added that though the Chinese wine market has seen substantial decline in import volume in 2018 after five years of fast growth, the average price per litre of imported wine has been rising.
This trend of premiumisation has created opportunities to Australian premium wine producers.
The report highlighted the example of Treasury Wine Estates, it said the company had managed to capitalise on the reputation of its premium brand Penfolds and built a sound presence across various channels in China.
The Chinese wine market has been one of the battlegrounds in the USA-China trade war, with China snapping three rounds of punitive tariffs on USA wines.
"US wine is now subject to a total levy of 106 per cent, including tariffs, a value-added tax, and an excise tax. These duties are having a marked impact on the profits of stakeholders along the chain – and this is impacting the competitive positioning of US wines," the report said.
USA wines now enter the China market costing 64 per cent more than comparable Australian wines that enjoy zero tariff because of the free trade agreement with China.
The Rabobank report declared that Australia has emerged to be the “clear winner” in the Chinese wine market amid the USA-China trade war.
(the writer can be contacted at: SLawMathews@thewinechronicle.com)
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