The value of exports of wine to China dropped to almost zero in December, according to statistics from industry group Wine Australia. The total value of wine exported to China for all of 2020 dropped by 14% to about 1 billion Australian dollars .
Before November, China was Australia's biggest wine market by far. In 2019, more than a third of the wine that Australia exported went to China. The country bought $840 million from Australian vineyards, according to Wine Australia. That year, Australia sold more wine by value to China than to the United States, United Kingdom and Canada combined.
Of Australian wine, red varieties are the most popular in China, Purbrick said, although recently consumers had begun to branch out into sparkling and white wines. Some Australian winemakers also attribute the popularity of Australian wines to what they describe as the country's clean environment and appealing climate.
The coronavirus pandemic, meanwhile, led to reduced orders from China and elsewhere as economic growth slowed around the world.Political relations between Australia and China began to rapidly deteriorate in April after Prime Minister Scott Morrison called for an international investigation into the origins of Covid-19.
In August, the Chinese Ministry of Commerce announced an"anti-dumping investigation" into Australian wine, which led the ministry in November to impose temporary tariffs of up to 212%. It isn't clear at this stage when the tariffs will expire or be made permanent. Vintners who spoke to CNN Business mostly said that they didn't blame the Australian government for the predicament. They said they believed that Canberra had done its best to negotiate with China — though Tahbilk Group's Purbrick said Canberra could perhaps have handled its calls for a Covid-19 investigation a bit more diplomatically.
The domestic industry is"deteriorating rapidly," the application said, adding that low-price Australian wine is"damaging the domestic industry" in China. Bruce Tyrrell, managing director of Tyrrell's Wines in New South Wales, put it this way:"The sales of domestic Chinese wine started to decline and the Chinese wine markers started to say, 'Get these bloody Australian winemakers out of our market.'"Tyrrell said that while China had made up as much as 25% of his business, his winery was now treating it as a non-market.
Ultimately, it will be up to the World Trade Organization to decide how valid the anti-dumping claims are, according to Sean Langcake, principal economist at BIS Oxford Economics in Sydney. Some vintners told CNN Business that they are hopeful that India, with its rapidly growing economy and middle class, might be an option, while others said they are looking to develop more obscure markets like Kazakhstan and Uzbekistan.
White said that he hoped that the dispute would be resolved within a year, but other vintners aren't expecting a break anytime soon.