Australian winemakers wooing Asian markets: Wine exports looking up after 9 year gap

By @diplomatist10 on
Aged wines
Bottles of aged wines, some of which date back to 1895, are lined up in a wine vault containing 280,000 bottles of museum wines in Tokaj October 22, 2013. Dubbed the "king of wines, the wine of kings" by Louis XV of France, Hungary's Tokaji wine is undergoing a makeover as the region hopes to regain fame lost in decades of mismanagement. Known for its exquisite sweet tipple, the eastern Hungarian wine region is clamping down on poor quality produce and establishing new standards as it tries to lure back high-end customers to arguably the best dessert wine in the world. Picture taken October 22, 2013. Reuters/Laszlo Balogh

There is a new renaissance in the Australian wine industry with exports looking up for the first time in 9 years. According to Stuart Barclay of Wines Australia, the marketing arm of the Australian Grape and Wine Authority, wine exports from Australia have increased by 5 percent to fetch AU$1.89 billion in the last 12 months. It is the first ever increase in export revenue for Australian wines since 2006/2007.

The chief reason for resurgence of Australian wines is its growing acceptance with Asian taste buds. The new demand from the Asian market is driven by the region's bulging middle and upper classes searching for new gastronomical pleasures aided by their rising incomes, reports the AFP.

“It's really been a rapid change in attitudes towards wine,” noted Sirromet's sales director Rod Hill, who makes a specific mention about China. In the past, it was hard to see people in bars drinking wine, but today there is an unbelievable array of wine lists waiting for Chinese customers.

China market

The export of Australian wines to China has jumped 32.1 percent in the year until June 2015, making it the third-largest export market after the United States and Britain, according to Wine Australia.

The demand for Australian wine is not only limited to China, but is swelling in many other parts of Asia Pacific including Hong Kong, Malaysia, Taiwan and Thailand. Clearly, Aussie wine-makers are delighted at the forecast that the consumption of wines in Asia is set to grow strongly in the coming years.

However, Aussie players will have to work hard to increase their share in China as Chinese wine market is hungover on Old World styles. French wines are leading the race in mainland market with a 42.28 percent share, according to figures from Austrade. Australian wines have so far notched up a market share of 12.4 percent.

Australia has set into motion an action plan to boost wine exports in Asia and has drawn up a long term strategy. Wine Australia recently commissioned a researcher Armando Corsi, to create a cheat-sheet for marketers that will match the Western taste descriptions to their Chinese equivalents.

The plan is to make Asian consumers more comfortable with Australian wines and induce brand loyalty. Many individual wineries in Australia are also conducting tours for Asian tourists and guiding them through the whole process--from bud burst to tastings from barrels and bottles.

“The Asia- Pacific represents an important opportunity for Australia and we are on its doorstep," Barclay said.

Australia is also hoping to leverage the weakening Australian dollar and lower tariffs from free-trade deals with China, Japan and South Korea to expand its wine presence in the region.

Challenges

Certainly, expanding awareness about Australian wine quality has contributed to the growth in Australian wine exports to 724 million litres in the last financial year, attests Barclay. But that does not mean all Australian wine-makers are out of the woods. Besides fluctuating exchange rates, they still face challenges such as climate change, a continuing shortage of fruit, threat from imports and hard-to-crack American market, reports Government News.

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