Friday, April 19, 2024

Higher taxes dilute wine exports

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China’s import taxes have slashed 10% from the final value of Australian wine exports over the year to June, despite growth in sales to other markets.

Data from Wine Australia showed total exports fell to $2.56 billion over the 2021 financial year.

wine barrels
Photo: chris18769 from Pixabay

Exports to China plummeted 45% to $606 million. Beijing’s introduction of anti-dumping tariffs and duties in November – ranging from 107% to 200% – saw exports almost wiped entirely – just $13 million was recorded in the second half of the financial year, compared to $419 million in the same period one year prior.

Including Hong Kong and Macau, total exports to greater China were at $793 million, representing a 33% fall. That was helped by a 111% surge in Hong Kong to $187 million, making it the fourth-largest market.

Outside of China, Australian wine exports actually increased by 12% by value to $1.96 billion, and 6% by volume, to 643 million litres.

Exports to the United Kingdom hit their highest levels in a decade, jumping 23% to $472 million as COVID lockdowns shut pubs, bars and restaurants, and charged liquor store sales. Uncertainties around Brexit import duties also contributed to a 40% surge in exports over the first half of the period.

That underpinned the 18% increase in European sales to $724 million.

In south east Asia, growth in Singapore and South Korea particularly saw exports lift 14% to $207 million. Oceania sales lifted 4% to $107 million.

“Exports increased to the UK, Singapore, South Korea, Malaysia, Taiwan and Hong Kong by a combined $240 million, but they did not offset the decline in exports to mainland China,” Wine Australia’s general manager of corporate affairs and regulation, Rachel Triggs said.

A 7% slowdown in United States exports to $400 million dragged North American imports down 5% to $586 million.

By volume, the United Kingdom is the biggest destination for Australian exports. It received 269 million litres, up 16%, followed by the United States’ 8% dip to 127 million litres.

China’s 57% cut saw it receive 52 million litres, but just enough to keep it in third. Canada was next with 51 million litres, down 5% (and fifth by value at $184 million), while Germany increased 14% by volume to 36 million litres.

Wine Australia expects the industry’s production sector to rebound strongly with the 2020/21 harvest declared a “Goldilocks” vintage that saw record grape crush volumes. The 2.03 million tonne crop harvester by growers was 31% higher than the 2020 vintage and 19% more than 2019.

That lean harvesting period meant the amount of wine Australia had to sell last year was at an historic low.


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