Australia's wine industry grapples with oversupply issues amidst Chinese tariffs and pandemic disruptions

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Australia's wine industry is dealing with an oversupply issue that experts predict will take years to rectify. This challenge is attributed to Chinese tariffs and heightened production.

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Australian wine exports registered a decline of 10% in value, reaching A$1.87 billion, and a 1% dip in volume to 621 million liters for the year ending June, according to Wine Australia's Export Report. Ties with biggest trading partner China deteriorated in 2020 after Australia called for an inquiry into the origins of COVID,The curbs battered the wine industry, with exports to China shrinking to just $5.2 million in the year to June, from a peak of $1.2 billion for the year to January 2020, when the pandemic began to take hold.

Diversification into markets such as Britain, Europe, the United States, and elsewhere in Asia would take time to yield results, McLean added. But even if the tariffs are lifted this year and Chinese wine consumption recovers, Australia’s wine industry will take at least two years to work through the surplus, Piggott said, as the curbs had coincided with an exceptional growing season.

 

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