11,000 litres of Australian wine detained in South China

According to Chinese customs data, over 11,000 litres of Australian wine has been detained in Shenzhen due to the trading dispute between the two countries.

Before the Chinese Ministry of Commerce (MOFCOM) announced last week that it would be imposing tariffs of between 116% and 218% on imports of Australian wine for the next five years, as reported by South China Morning Post, 8,640 litres from Australia’s Paspaley’s Bunnamagoo Estate winery and 2,646 litres of red wine from Australian private label supplier Lindsdale were banned in Shenzhen in February.

The imports were stopped for the respective reason of “poor labelling” and “excessive use of additives”.

Tony Battaglene, CEO of Australian Grape & Wine, said in the interview that the industry would now strive to grow in new and existing markets, for example, the domestic market and the UK, and were pushing sales across Asia, Europe and the US.

This resonates with the latest market data from Wine Australia that in the year ended December 2020, sales of Australian wine was 9% up in volume in the UK off-trade market, and by 6% in the USA off-trade market.

However, there was a reduction in overall inventory was driven by a decrease of 100 million litres in white wine stocks, partially offset by increases in red, sparkling, fortified and other products.

The data pointed out the challenge to balance supply with the demand opportunities as different markets have their own preference on the Australian products.

Andreas Clark, CEO of Wine Australia, said, “This is particularly important as wineries look to divert exports away from China, which predominantly bought our red wine, to other markets such as the USA and the UK, which have a higher demand for white wine.”