Australian wine exports to Asia: Growing markets, cultural differences, and following the trends
Educating the wine trade, sommeliers and the media on Australia’s wine history and evolution will also help boost the country’s products in Asia.
66% growth in exports to China
China showed the strongest growth out of Australia’s export markets last year, growing 66% to $370m AUD ($262m), figures from Wine Australia’s Export Report show.
And those figures don’t yet reflect the impact that the China-Australia Free Trade Agreement (which was signed in June and entered into force in December last year) is expected to have.
“We’re seeing a rising interest in wine culture from the middle class and the growth in China and the broader Asia Pacific region is remarkable,” Stuart Barclay, general manager of marketing at Wine Australia, told BeverageDaily.
“I would expect the growth in China to continue off the back of Free Trade Agreement coming in to force, and we had strong demand for Certificates of Origin late last year for exports to China.
“To ensure we’re capitalising on the opportunities this growth represents, we’ve strengthened our Asia Pacific team and they are working closely with our in-market team in China.”
Long term potential across Asia
China isn’t the only market seeing such strong growth. Exports to Hong Kong were up 22% to $132m AUD ($93.4m) in 2015, making it the fifth biggest export market for Australian wines. There is strong demand for higher-priced premium wines: wines above $10 AUD ($7) per litre were up 22% to 2.9m litres.
While China and Hong Kong may be the largest Asian markets for exports, there is also long-term growth potential from countries such as South Korea, Taiwan, Malaysia and Thailand, particularly with a change in tariffs.
It’s crucial to get on the ground in export markets, said Barclay, and this is particularly relevant in Asia.
“You need to be in front of the wine trade and influencers and it can’t be a one-off, you need to be there regularly, engaging with them and understanding the individual dynamics of each export market,” he said.
“Asia in particular has a lot of cultural differences and so it’s important to better understand the wine trade and the wine consumer in those markets; keep on top of what the wine trends are; and learn how to maximise your business relationships in-market.
"Finding the right export partner takes a lot of time and effort but it’s crucial to export success.”
Change in tariffs
Australian wine exports to South Korea grew 38% in value to $11.7m ($8.3m) in 2015. “Exports are improving off the back of the recently ratified free trade agreement, which saw all tariffs reduced to zero,” said Barclay. “Competitors had enjoyed zero tariffs for a while so we’ve had an uneven playing field in terms of competitive pricing.
“Our job now is to increase the awareness of Australian wine in the South Korea market and encourage the local wine trade and consumers to explore fine Australian wine to increase our market share (we’re currently ranked 7th in terms of imports).”
Taiwan’s interest in Australian fine wine is growing, and Wine Australia’s first collaborative tasting event in the country was held in partnership with Austrade recently. In 2015 wine exports to Taiwan rose 27% to $17.1m ($12.1m) while volumes rose 26% to 2m litres.
The value of Australian wine exports to Malaysia rose 56% in 2015 to $54.3m ($38.4m) and volume was up 52% to 4.5m litres. In particular, wines with higher price points saw strong growth in 2015.
The value of exports to Thailand grew 24% to $16m ($11.3m). “We’ve had a free trade agreement in place with Thailand for a decade but we’re looking more closely at that market now as the last of the tariffs have been eliminated and are now at zero,” said Barclay.
Value growth in the biggest export markets
The value of Australian wine exports jumped 14% to $2.1bn AUD ($1.5bn) in 2015, the highest value since October 2007. In addition, the value of exports grew in each of Australia’s top 15 export markets.
There were 1,517 active exporters in 2015, up from 1,395 the year before. Australian wine was exported to 122 destinations, and the top markets (by value) are the US, UK, China, Canada and Hong Kong.
One of the challenges for Australian wine is to ensure that people appreciate its character, said Barclay.
“Australian wine quality is exceptional and we have a diverse offering, so our biggest challenge is to bring this richness of styles to people’s attention,” he said.
“We have 65 wine regions and each region has its own unique terroir, wine style and character. We need to keep telling those regional stories and help educate wine trade, sommeliers and media on Australian wine’s history, the evolution of traditional varieties and the revolution in winemaking techniques.
“We have an incredible winemaking heritage spanning more than a century, we’ve taken traditional wines and techniques and evolved them to suit our unique terroirs and we’ve established ourselves as a world leader when it comes to research and development, and innovative winemaking.”
As the body responsible for supporting the Australian wine sector and promoting Australian wine overseas, Wine Australia has a calendar of activities for wineries and exporters to participate in in the key export markets around the world.
