DAN'S WINE BLOG- CHINESE PICKLES

Friday, June 18, 2021

You are probably sick of hearing about Australian wines problems with China! BUT, how much have you heard about China’s problem with Chinese wine?

In the few months since CADA (China Alcoholic Drinks Association) levelled phony charges of wine dumping against Australia, which led to the Chinese government placing obscene tariffs on Aussie wines, sales of wine to China have virtually disappeared leaving a $1.2 billion hole in the export of Aussie wines.

While this move was politically inspired, there are other underlying causes/reasons for CADA wanting to significantly reduce the level of wine imports to China.

During the period in question of the dumping charges 2014-2019, at a time when sales of wine in China were growing robustly, the production and sales of Chinese wine in China dropped by around 50%. Just imagine if you can what the effect of a 50% drop in domestic sales would do to the Australian wine industry – many of the wineries that I personally know would fold.

According to CADA’s own data, in 2020 the 130 largest wine producers in China (the top handful have French connections, either winemakers or board members), suffered a 6% drop in production and an almost 30% drop in sales – which can’t be helping their growing overstock situation at all. This is despite the government’s push for people to support and buy Chinese wine before imported wine. The push being led by none other than, President Xi Jinping, who for the first time earlier this year toured the wine growing regions and exalted his minions to reject imported wine and buy only Chinese wine.

It has become obvious over the last decade, that the Chinese wine drinkers prefer imported wine, not only for its greater quality and flavours, but also for the lesser risk involved (Remember the baby milk Melamine Incident?).

Yes, there are some excellent wines being made in China and I have tasted a few including a cracking Riesling, a handful of good Chardonnay (usually made by Australian or French winemakers), a couple of superb Marselan and a smattering of decent Cabernet Sauvignon. However, they are few and far between. The majority of wines being boring, mundane wines, slightly reminiscent of Soviet era wines – only just drinkable.

So the question then becomes, does the Chinese government now pick on the French or other European wine producers to try and stop the hemorrhaging of their own wine industry, thereby also creating great opportunities for lesser wine producers such as Argentina and South Africa? The South Africans recently announced that they are going to make a “big push” on selling wine to China. Or, having punished the politically recalcitrant Aussies, do they leave their own wine industry up to its own fate?

This is the question being pondered by wineries in France, Spain, Italy, and most certainly in our neighbours and allies, New Zealand.

Like everything else to do with China, the answer will be complicated and convoluted, but at the end of the day Australian wine needs to find other viable, long-term (China only lasted 10-12 years) countries to sell its excellent wines to.

Cheers, have a great week and remember to #chooseaustralianwine and where possible drink #emergingvarieties