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Wine exporters across regional Victoria are building stronger ties with overseas countries to offload red wine, in a challenging harvest amid the ongoing trade dispute with China.
Key points:
- Australian wine producers are building exports to India and South-East Asia amid ongoing trade problems with China
- Some wine grape growers are struggling to sell their product
- Vietnam is firming up as the next major destination for Australian wine
Up until 2019, the Hanging Rock Winery would routinely sell half of its wine to China.
But, the lucrative market all but dried up overnight after China imposed hefty tariffs on Australian reds and whites in 2020.
Hanging Rock Winery, like many others in the wine export business, had to pivot and has since been working to build its presence in Japan, Germany and Fiji.
General manager Ruth Ellis said its exports to Japan have more than tripled from 300 dozen bottles of wine annually to about 1,000 dozen bottles.
"We've got two wines that we developed just for the Japanese agents last year, which are going absolutely gangbusters," she said.
"Our agent over there, he came here [to the winery] when he was 18 and lived with us for a year [and] his 18-year-old son has come this year to do vintage with us."
According to figures from Wine Australia, the value of wine exports grew in 71 countries last financial year.
While the United Kingdom and the United States markets have been Australia's go-to, Ms Ellis says many in the industry are now looking for the next big opportunity.
"Whether it's India or not, it is an interesting one," she said.
"There's no doubt we're seeing great growth there, but it's great growth starting from a really small base.
"There's nothing new in Australian wine about reinventing ourselves."
Grapes left on the vine
Grape and Wine Australia chief executive Lee McLean says along with the wet weather and disease outbreaks, oversupply is creating "one of the most challenging vintages" for many vineyards in regional Victoria.
"Many growers out there are struggling to find a buyer for their grapes," he said.
"All of this has flowed on from the import duties that have been imposed on our sector by China."
The federal government has partnered with Australian Wine to launch its Wine Export Ready Hub, to help producers grow their wine sales internationally.
Mr McClean said the market diversification agenda by the government has concentrated efforts on Japan, Korea, and South-East Asia.
"They are all markets that have some really solid growth opportunity that we can build relatively quickly," he said.
Aussie wine to Vietnam
In the past 12 months, the strongest growth for wine exports was to South-East Asia, up 16 per cent to $305 million annually.
Domaine Asmara in the Heathcote wine region previously sold a majority of the 40,000 red wine bottles it produces each year, to mainland China.
Owner Andreas Greiving says Vietnam is firming up as a viable long-term alternative to the Chinese market.
"From our area, I think we're the only one exporting to Vietnam, so we do have a bit of a head start," he said.
The Australia-New Zealand-ASEAN Free Trade Agreement reduced import tariffs to 20 per cent last January.
However, Mr Greiving says there's still a lot of "red tape" that is involved with selling wine in the country.
"Once you get a foothold, once you overcome the barriers, then it is a rather interesting market," he said.
"There are quite a few expatriates over there, especially in Ho Chi Minh city, that are going to drink a lot of wine and [so] there is a market for premium wines."