With the cancellation of 175% tariffs on Australian wine, Australian producers are hoping for a comeback in China. Until 2020, about 40% of the value of Australian wine exports went to China. At the same time Australia accounted for about 40% of the value of all Chinese wine imports. However, even before the de-facto import ban imposed on Australian wine, both imports and wine consumption were declining. For Australian producers to regain the lost market share, Chinese consumers are going to have to start drinking more wine.
Global, Australian and Chinese Wine Production
Ten countries consistently account for about 82-84% of the volume of global wine production. The top five – Italy, France, Spain, USA and Argentina alone account for about 62-65%, according to statistics from the International Organisation of Vine and Wine (OIV).

Annual global wine production has generally hovered around 250-290 million hectolitres (hl). For reference, one hectolitre = 100 litres. On a global scale wine production has not followed any particular upward nor downward trend, but some countries such as Chile, the United States, South Africa and particularly New Zealand have followed an upward trend.
Australian wine production grew strongly between 1995 and a peak in 2004, dropped to a lower level until peaking again in 2021 (the year after the Chinese import ban went into effect).

Although China features in the top 10 wine producers worldwide, production has been declining since 2016. Between 2011 and 2016, Mainland China accounted for about 5% of global production and was producing as much wine as Australia. Today it is less than 2%.

Australian Wine Exports and Chinese Wine Imports
Australian wine exports at their peak were worth more than US$ 2 billion per annum. China has been a major export destination for Australian wine, but exports to China grew substantially after 2015. In 2019, China accounted for 39% of the total export value and 18% of volume – a testament to the fact that Australian wine commanded a premium compared to other Australian wine export markets.

Contrary to other commodity groups like coal, Australian wine exporters were not able to fill the gap left by China. Non-Chinese wine exports did increased from US$ 1.4 billion to US$1.6 billion between 2020 and 2021, but fell back to previous levels in 2022 and 2023. In volume terms, the amount of wine exported to non Chinese markets did not increase after 2020.
Australian wine was almost as important to Chinese importers as Australian exporters. In 2019 and 2020 Australian wine accounted for 36% and 39%, respectively of Chinese wine imports. In volume terms Australian wine accounted for about a quarter of imports between 2018 and 2020.

However, it is worth noting that overall Chinese wine imports peaked in 2017/2018 and have been declining since. China in 2023 imported only about a third of 2017 levels. The loss of Australian wine has not been replaced with wine from other origins and also needs to be viewed in context of overall declining imports. Five countries accounted for about 90% of Chinese wine imports prior to 2020 – France, Australia, Chile, Spain, and Italy. France, Chile, Spain and Italy did not see a benefit from the exit of Australian wine from the Chinese market. All four are exporting less to Chine than in 2019.


Global and Chinese Wine Consumption
Global wine consumption appears to be following a moderate downward trend since 2007. The only large market which has shown a steady growth trajectory has been the United States. Consumers in key markets are either drinking less (France and Italy) or not drinking any more wine (Germany and the UK).

China has experienced significant declines in wine consumption after 2017. In 2016/2017 China accounted for 8% of global wine intake – this was down to 4% in 2022. In volume terms, China in 2022 consumed 46% of 2017 levels.

Simply said, for Australian wine to regain its previous market position, Chinese consumers need to drink more wine.