Australia puts positive spin on Chinese slide

16th April, 2014 by Gabriel Stone

Wine Australia has argued that Chinese government austerity measures stand to benefit the wine industry in the long term, despite attributing its latest significant volume slide in this market to the crackdown.

Photo credit: Wine Australia

Photo credit: Wine Australia

According to Wine Export Approval Report March 2014, released this week, exports of Australian wine to China during the previous 12 months fell by 12% to 37 million litres.

The same report showed that Australia’s overall volume exports fell by 6% to 677m litres, echoing the country’s previous data covering the 12 months of 2013.

Despite this continuation of declines seen by many companies exporting to China since the country’s new government came to power 18 months ago, Wine Australia’s general manager for market development James Gosper stressed the positive aspect of cuts on lavish gift giving.

“I believe that the controls the Chinese government has put in place are going to be the best thing for industries in that market,” he told the drinks business. “A lot of importers were bringing in unknown brands and even creating them to give as gifts.”

As a result, he continued, “there was a huge amount of trade in brands that hadn’t established themselves; they had no heritage or history and their value couldn’t be traced online.”

In addition to this problem for consumers of understanding the wine in their possession, Gosper highlighted the challenge for producers in connecting with their audience

“The brand owners and importers didn’t ultimately understand who the end consumer of that wine was,” he remarked. “One of the very basic understandings for building a brand is to know who’s drinking your wine. If the consumer is faceless, there’s very little opportunity to build your brand.”

Suggesting that many of these brands with weak foundations were now disappearing from the market, Gosper predicted: “Consumers who really want to be wine consumers will start to see a traditional wine market emerging; wine brands with a pedigree and heritage will start to become a lot more important.”

According to Gosper, this shift in the shape of the market “will mean slower growth, but it’ll be more sustainable growth.”

Indeed, he argued that as a result of these measures China “will continue to be an incredibly strong market,” noting: “over 500 million Chinese will enter the middle class in the next 10 years and all of those will be thirsting for what middle class consumers in the West have, whether that’s cars, bags or wine. It means they will want to understand what wine is about.”

His comments fall into line with an estimate made last year in a Chinese newspaper that the country’s growing middle class could see Australian imports boom by as much as 50% during the next three years.

In line with this expanding potential customer base, Gosper pointed to the “huge focus” on education within Wine Australia’s Chinese strategy. In short, he concluded that, despite these short term declines, “there’s a great opportunity for Australian winemakers in China.”

Detailed analysis of Australia’s recent export performance will appear in May’s issue of the drinks business.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

Brand Ambassador – Santa Rita Estates

Santa Rita Estates
London or Hertfordshire but with flexibility to travel, UK

Sales Executive - Wine and Spirits Awards

The Drinks Business
Central London, UK

On-Trade Channel Manager

Delegat Europe Limited (UK)
London / Midlands, GB

Trade Marketing Analyst

Delegat Europe (UK)
London, GB

Key Account Executive

Delegat Europe Limited (UK)
London / Midlands, GB

Senior National Account Manager

Bibendum PLB
London, UK

ON-TRADE Sales Executive

Roberson Wine
London, UK

OFF-TRADE Sales Executive

Roberson Wine
London, UK

Judging Week Runners

Decanter World Wine Awards
ExCel Centre, London E16, UK

Sales Administrator

Les Caves de Pyrène
Guildford, UK

Retail Commercial Executive

Laithwaite's Wine
Theale, Berkshire

Wine Buyer

Conviviality Plc
Crewe, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Sales Account Manager - On-Trade

Berkmann Wine Cellars
M3/M4 corridor

Media Sales Manager - Hong Kong

The Drinks Business Hong Kong
Hong Kong

The Global Merlot Masters 2017

Deadline : 31st March 2017

The Prosecco Masters 2017

Deadline : 10th March 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 3rd March 2017

Click to view more

The Global Sparkling Masters

the drinks business is thrilled to announce the launch of The Global Sparkling Masters

The Global Rosé Masters 2016

the drinks business is proud to announce the launch of the Global Rosé Masters 2016.

The Prosecco Masters 2016

Now in its third year, the competition will reflect the growth in popularity of this fresh and exciting sparkling wine from the picturesque regions of Veneto and Friuli.

The Global Pinot Noir Masters 2016

After the success of last year’s competition that judged over 250 wines from no less than 16 countries, the drinks business is proud to announce the third year of the Global Pinot Noir Masters

Click to view more