Wine Australia closing China office: CNBC

“Australia’s leading wine industry body Wine Australia will be closing its only physical office in China after sales to the greater China succumb to Beijing’s prohibitive duties,” reports CNBC.

The report quotes a source at Wine Australia as saying, “Wine Australia has made the difficult decision to close our physical office in Shanghai. This decision follows extensive consultation with the Australian grape and wine sector and is based on the current environment and market opportunity.”

Australia’s wine success

During the past dozen-plus years, Australia steadily rose to be China’s top source of imported bottled wine, reeling in France, which once seemed to have an insurmountable lead, and topping AUS1.2 billion over a calendar year at one point though it heavily skewed toward TWE / Penfolds.

The situation turned when China started an investigation in 2020 into claims Australia was dumping wine and then imposed harsh tariffs in 2021 that topped out at 218 percent.

Per the CNBC article, Wine Australia will remain active in China via trade shows, marketing partners and educators.

Wine Australia’s initiatives

Wine Australia has ranked among the most active, if not most active, promotion bodies in China over the years, making its presence known in areas such as Australian winery brand tours (see Wine Australia comes to Beijing), trade show pavilions, wine education and certification programs, awards and contests (see Wine Australia Awards to provide four trips Down Under) and lots more.

There were many reasons for Australia’s wine success in China — I wrote about ten of them in this Wine Searcher article — and Wine Australia was one of them, with Willa Yang the head of market for China for most of that time.

Australia’s legacy

Anyway, the story of Australia, China and wine is far from over. The power of Australia wine, and notably of Penfolds / TWE, is evident. It can seen in everything from how producers emulate the “bin” series and portfolio range — Xige Estate in Ningxia has been called a kind of Penfolds (see China’s Wine Egg Hatches) — to the wide range of distributors who sell counterfeits or OEM wines that invoke labels and logos of brands such as Penfolds, Wolf Blass and YellowTail.

It can also be seen in the current debates about how much stock, especially that of TWE, is left in China (we can still find plenty in my Beijing neighborhood), in the enduring influence of Australian professionals who have advised local producers on everything from viticulture to wine to marketing over the years, and in the news that TWE will launch a made-in-China Penfolds. And given how quickly the world can change — who expected either those hefty tariffs of a pandemic of this magnitude three years ago — who knows if Australia will rise one day again in China.

Grape Wall has no sponsors of advertisers: if you find the content and projects like World Marselan Day worthwhile, please help cover the costs via PayPal, WeChat or Alipay.

Sign up for the free Grape Wall newsletter here. Follow Grape Wall on LinkedIn, Instagram, Facebook and Twitter. And contact Grape Wall via grapewallofchina (at) gmail.com.