Rocketing exports make Hong Kong a bright spot for Australian wine

Hong Kong was a “standout” destination for Australian wine in 2023, with value exports up 74% year-on-year. But how much is being on-shipped to China amid ongoing tariffs?

Value exports of Australian wine to Hong Kong rose 74% YOY in 2023. In the 12-month period, Australia exported 9.4 million litres of wine valued at AU$290 million to Hong Kong (£149m), also representing an increase of 27% in volume compared to the same period in 2022.

Peter Bailey, Wine Australia’s market insights manager, called Hong Kong an “interesting market” — much like Singapore, it is used as a “trading hub” with wine imports often on-shipped to other destinations.

China, previously Australia’s biggest export market for wine, imposed punitive tariffs on the country’s wine in 2020 as a result of political tensions caused by the Covid-19 pandemic. The tariffs have had a major impact on Australia’s wine industry in the years since.

In late October 2023, China’s Ministry of Commerce announced a review of the tariffs on Australian wine. The review is expected to take five months to conclude, meaning the two countries could come to a resolution in March.

China’s tariffs could be an explanation for why exports to Hong Kong have risen so significantly in 2023, with wine potentially being shipped into China via the region.

Looking at Wine Australia’s December 2023 figures, there were 531 exporters shipping wine to Hong Kong, an increase of 138 businesses compared to December 2022. This is still significantly lower than the 2720 exporters to mainland China in November 2020 (just prior to the imposition of the duties on Australian wine).

Looking at data from Trade Data Monitor, Bailey explained to db that Hong Kong imported 31 million litres worth of wine in 2023. In the same year, 11 million litres of wine (from all source countries) were exported from Hong Kong – about 35% of what was imported.

While the data does not show the wine source countries it does show the top four destinations for all of Hong Kong’s wine exports were Macau, mainland China, Singapore and Vietnam, suggesting that some of the imported wine is indeed making its way onto the mainland.

However, Wine Australia has no concrete data to reveal how much. Bailey says: “While Wine Australia’s export approvals track wine to its port of destination, we do not have visibility if the wine is then on-shipped elsewhere at a future time. So, we cannot determine from our data where it goes to after it arrives in the market.”

Hong Kong is an increasingly important market for Australian wine in its own right, and not only as a trading hub.

Value exports to Hong Kong have almost tripled in the last decade from AU$77,623,954.83 in 2013.

Asia as a whole is the number one region for Australian wine export value, holding a 37% share of total export value, compared to 29% for Europe and 27% North America.

“Within Asia there are, of course, many different markets with many different opportunities for different styles of wine,” bailey says. “Developed wine markets such as South Korea, Japan and Hong Kong are markets where Australian wine exporters have been fostering solid relationships with trade and consumers for many years and continue to be key markets in the region.”

Emerging Asian markets, including Thailand, Vietnam, Malaysia and Philippines, hold promise for Australia, Bailey says, though these relationships will take time to nurture.