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UK wine exports strong in wake of China tariffs

UK wine exports strong in wake of China tariffs article image

Australian wine exports declined by 10 per cent in value to $2.56 billion in 2020-21, compared with the previous financial year, due mainly to tariffs imposed by China.

And export volume declined by 5 per cent to 695 million litres (77 million 9-litre case equivalents), according to the latest Wine Australia’s latest Export Report.

The average price per litre for wine exports declined by 5 per cent to $3.69 free on board (FOB).

Wine Australia General Manager Corporate Affairs and Regulation Rachel Triggs said the key factors in the declines were the downturn in exports to mainland China following the imposition of tariffs and the cumulative effects of three consecutive lower vintages in 2018, 2019 and 2020 which meant there was less wine available to export.

Since the imposition of import tariffs, exports of Australian wine to mainland China have dropped dramatically. Total exports for Quarters 3 and 4 in 2020-21 were $13 million compared to $419 million in 2019–20, prior to the imposition of tariffs.

However, UK were at their highest level in a decade.

The value of UK exports increased by 23 per cent to $472 million and volume by 16 per cent to 269 million (30 million 9-litre case equivalents), making the UK the biggest destination for exports by volume and the second by value, said Ms Triggs.

“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,” she said.

“However, excluding mainland China, exports increased by 12 per cent in value to $1.96 billion and increased by 6 per cent in volume to 643 million litres.”

Significant growth in exports to Europe

Ms Triggs explained that the decline in the overall average value was due to a drop in the share of bottled exports; from 45 per cent of the share of volume in 2019-20 to 39 per cent in 2020-21.

This again was an impact of the mainland China market as it had predominantly been a bottled wine market, and also the growth in exports to the UK which was dominated by unpackaged exports which were bottled in-market.

The most significant growth came in exports to Europe (including UK), up 18 per cent to $724 million, the highest value since 2010-11. There was also growth to South East Asia, up 14 per cent to $207 million and Oceania, up 4 per cent to $107 million.

The growth to these destinations was offset by the decline to Northeast Asia (which includes mainland China), down 29 per cent to $909 million, as well as to North America down 5 per cent to $586 million.

Destinations

The top five markets by value were:

  • Mainland China, down 45 per cent to $606 million

  • United Kingdom (UK), up 23 per cent to $472 million

  • United States (US), down 7 per cent to $400 million

  • Hong Kong, up 111 per cent to $187 million, and

  • Canada, down 1 per cent to $184 million.

The top five destinations by volume were:

  • UK, up 16 per cent to 269 million litres

  • US, down 8 per cent to 127 million litres

  • Mainland China, down 57 per cent to 52 million litres

  • Canada, down 5 per cent to 51 million litres, and

  • Germany, up 14 per cent to 36 million litres.

https://marketexplorer.wineaustralia.com/export-dashboard

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