Last week, the South Australian Government celebrated a post-tariff record for wine exports after shipping $790 worth into mainland China in the 12 months up to February. While leading industry stakeholders have already warned that this initial re-stocking period should be considered as indicative of the “new normal,” the data has been welcomed by industry and government alike.

“It’s been 12 months since wine exports to China resumed. Since then, the latest data shows that local wine producers’ exports have reached more than 80 per cent of the all-time highs in 2020,” said Joe Szakacs, South Australia’s Minister for Trade and Investment.

In the wake of this news, the South Australian Labor Party member has launched a new China wine and food export campaign it hopes will drive appeal among China’s growing population of middle class consumers, which is currently estimated at around 500 million and tipped for growth. The new campaign will see 15 South Australian wine and three food brands featured at the trending BISTRO restaurant chain across Shanghai and Shenzhen.

“By partnering directly with bistros, this campaign represents a new avenue for South Australian wine producers to reach fresh audiences in China,” Joe Szakacs said. “The pairing of South Australian wine with premium South Australian food is a match made in heaven and is perfectly suited to this BISTRO campaign.”

The concept represents a unique new entry point for South Australian wine producers and is being supported by the South Australian Government’s $1.85 million Wine Exporters China Re-engagement Support Program. To begin with, wine brands participating in the BISTRO campaign will include Torbreck, Taylors, Yalumba, Cimicky, Rymill, Wynns of Coonawarra, Thorn Clark, Kay Brothers, Mount Horrock, Pewsey Vale, Greenock Creek, Barossa Valley Estate, Golden Heights, John Dovel, Kirrihill.

The increase in South Australian wine exports to China is reflected by growth in the state’s exports to China overall, which rose 12 per cent to hit $4 billion in the past year, according to the latest ABS trade data. Szakacs says “this hasn’t happened by chance – it's come about because of a dedicated and ongoing effort to rebuild a strong trade relationship.”

Despite this, Wine Australia’s Manager of Market Insights Peter Bailey urges industry to remain cautious up until the export data becomes clearer, especially given the latest data from the International Vine and Wine Organisation showing that China’s wine consumption plummeted by 19.3 per cent in 2024.

“Chinese wine consumption is much lower than it was before the import tariffs were imposed, so it will take more time before it becomes clear what the new normal level of exports to mainland China will be, after this initial re-stocking period,” Peter Bailey said, reflecting on Wine Australia’s latest Export Report. In this report, which covers all exports from the 2024 calendar year, $712.2 million of the $843.3 million of Australian wine exported into China mainland was from South Australia – just under 85 per cent.

While Wine Australia’s CEO Dr Martin Cole says 2024 provided a “much-needed boost” for Australian wine exporters, he also says that “the grape and wine sector is not immune to global market challenges.”

Martin Cole told Drinks Guide, "the most pressing issue demanding immediate attention for Australia is high inventory levels coupled with declining global demand that have created a challenging market for red wine producers. Those in the warm inland regions have been particularly hard hit.”

Therefore, Peter Bailey concludes that “continued growth is not assured, and it is still important to focus on market diversification in a challenging global business environment.”

Continuing the conversation with Drinks Trade, former CEO of Tahbilk for 43 years Alister Purbrick has urged all Australian wine regions, producers and stakeholders to consider the need for a significant reduction in the volume of Australian wine being made each year.

“I think the first thing that's got to be done is we've got to recut our production cloth to suit the times, and that necessarily means a 25 to 30% reduction in vineyards. That's not just in the hot areas; that's also in moderate and cooler climates,” Purbrick said.

“We need about 1.2 million tonnes of grapes for our industry to have a balanced demand equation, and that's on the basis that we do get back to $500 million in China. If we can't quite achieve that, then it might be more vineyards that are required to go.”