Australia’s wine exports have historically been focused on one market at a time. First the UK – simple and the same language and heritage. Then the USA – a bit more complex due to the three tier system but still easily manageable.
Then Europe – more of a challenge. And more recently almost kicking and screaming into China – so difficult, different language, different rules a degree of corruption – all very complicated.
In 2003 the Riverland wine company I was managing sold five containers of Cabernet to China.
It was in fact to a biscuit company for them to use in their Moon Festival packs.
This gave me an insight on the potential of the Chinese market.
This sale was 0.5 percent of Australia’s red wine sales to China for the year!
At the time, everybody that I suggested China to, laughed at me. Too hard, no need etc.
By 2010 the market had exploded and was awesome.
It continued to grow until Xi Jinping raised the tariff to 212 percent – panic set in and the Australian wine industry has been suffering ever since.
Recently the tariff has come off and sales have boomed – but wine consumption in China has dropped down to the 2009 levels – around half of the 2019 consumption figures.
Thus putting all one’s eggs in the China basket isn’t a recipe for success.
With Trump in the White House it was only a matter of time before Australian wine exports to the USA were hit with a tariff, but also as time goes on, with less demand due to America’s rising costs of pretty much everything thanks to Donald’s tariff strategy.
The cost of wine in the UK is going through the roof thanks to the government.
So what will the Australian wine industry do?
Will it refocus on our previous star China?
There is room for improvement in some of our existing export markets – especially Canada – thanks to Trump.
Others, for example Thailand, have just lifted some of their restrictions on selling alcohol.
Japan? We have never, ever done well in Japan and a concerted, combined effort could partially redress this situation.
Where else can we sell our wines?
It will be interesting to see which – if any – adventurous souls tackle new markets that have potential, such as Poland, the fastest growing wine consumption country in Europe.
Mexico is showing good growth and now is not so keen on drinking American wines (source of almost all their imports).
Brazil support their home-grown wine industry but obtain most of their supplies from Chile and Argentina (who they loathe for historical reasons).
Indonesia has more than seven million non-Muslims.
Then there is Africa and the Middle East.
Not everybody in the Middle East is Muslim and some countries have reasonable rules about the sale of alcohol.
Africa is a very turbulent continent with 54 different countries, many of whom are at constant war with their neighbours or themselves.
Yet amidst this chaos there are some stable countries who are learning to enjoy the pleasure of wine – such as Nigeria, a country with 228 million people whose GDP is currently growing at 2.9 percent (Australia’s is 3.4 percent) or Kenya with 55 million people.
So where will it be that we focus on to survive and hopefully thrive in these tough times?
Same old, same old, or something new and scary?
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