Winemakers told to get personal

17 Apr, 2013 09:39 AM

INDIVIDUAL winemakers are being urged to visit export destinations themselves rather than delegate the task to help boost sales at a time wine exports are showing little growth and those to the lucrative Chinese market are sliding.

China has become increasingly important to producers, who can generate higher profit from sales there than in traditional and larger markets in the United Kingdom and the United States.

But figures released on Tuesday by Wine Australia, a statutory government authority, show wine exports to China fell 3 per cent to 41.5 million litres in the year to March. This is 23 per cent below a peak 54.6 million litres exported two years ago, The Australian Financial Review reports.

But importantly for wine makers, the value of wine sold to China continues to strengthen, gaining 18 per cent to $5.85 per litre. This compares with $3.14 per litre in 2011, reflecting higher sales of cheaper bulk wine, which were often used in Chinese wine labels.

Tightening conditions in China are being blamed on new President Xi Jinping's austerity measures, which include bans on extravagant spending, such as lavish banquets and excessive gift giving by civil servants. This has put more focus on selling wines through retailers and restaurants.

Wine Australia market development manager James Gosper said distributors and retailers overseas were noticing Australian wine makers were no longer visiting them.

"One piece of advice I have is to return to the markets," Mr Gosper said.

"I visited the UK, US and China (in March) and for the first time people were telling me that Australian wine makers had not visited for a long time.

"We represented our wines like nothing else many years ago. Aussie wine makers were there pouring wines at wine shows and everyone else caught on. Australia has retreated, I think wine makers are saying I can't afford it so I'll send my marketing or sales guy. It has been noted in those markets."

Wine Australia statistics show total wine exports grew 2 per cent to 719 million litres in the year to March, with bottled wine up 2 per cent to an average $4.43 a litre and bulk wine up 1 per cent to $1.02 a litre. Higher sales to the US and Canada offset falls to Britain and China. Exports to the US above $7.50 a litre rose 2 per cent to 4 million litres.

Burch Family Wines co-founder Jeff Burch said the rebound in the US did little to persuade him to re-enter that market, which he quit 18 months ago as the high Australian dollar suffocated profits for his Margaret River labels Howard Park and MadFish. The company had been selling wines in the US for nearly two decades. He is not worried about Chinese wine growth slowing. "It was unsustainable and there was a lot of opportunistic sales with bulk wine being sold at 50¢ or 60¢ a litre. But that's all gone now. Growth at the premium end is solid,'' he said.

Mr Burch said rising costs including soaring power bills were contributing to the worst conditions he had experienced in his business's 25-year history.



Screen name *
Email address *
Remember me?
Comment *


light grey arrow
The Minister of Ag can use WA's Gene Technology Act 2006 to manage GM & GM-free crops for market
light grey arrow
Time will judge if they can implement what growers are asking for. Not what a director
light grey arrow
Absolutely agreed. Chinese demand for high-quality protein is increasing, as is demand from