Australia's surge in wine exports to China begins to slow

By Peter Hobson

CANBERRA (Reuters) -Australia's wine export boom to China that followed an improvement in relations between the two countries is showing signs of slowing, amid a broader global decline in the number of bottles headed to the world's second-largest economy.

China is the Australian wine industry's most lucrative overseas market but its consumption of wine is falling sharply, amid a more gradual decline worldwide.

Beijing's lifting of tariffs on March 29 last year triggered a surge in exports. Australia shipped just over A$1 billion ($640 million) of wine to China in the 12 months to March 31 this year, data from industry body Wine Australia show.

That amount is just short of the record A$1.15 billion exported in the year to March 31, 2020 and follows a period of more than three years during which trade restrictions were in place and Australia shipped negligible amounts of wine to China.

However, exports have slowed after the initial rush, totalling A$126 million in the first three months of 2025, the least for any January-to-March quarter since 2016.

The influx of bottles from Australia in 2024 led to the first annual increase in China's wine imports since 2018, Chinese customs figures accessed using Trade Data Monitor show.

China's imports from other nations such as France, Chile and Italy have more than halved since 2018 and continue to trend lower.

"Australia has performed exceptionally well to get to a billion dollars," said Peter Bailey, market insights manager at Wine Australia.

"There definitely has been a slowdown...Continued growth for Australia is not assured."

China's trade barriers – imposed during a political spat between Beijing and Canberra in November 2020 – worsened Australia's wine glut, leading to huge inventories, a plunge in grape prices and a purge of vineyards.

Wine Australia said China will not solve the oversupply problem as it is importing a smaller number of pricier bottles than before.

Adding to those problems, Australia's wine exports to the rest of the world fell in the 12 months to March 31, it said.

Bailey said Australia could benefit from Chinese tariffs on the United States, which will likely halt U.S. wine exports to China worth around $50 million a year, and from Canada's shift away from U.S. wine, but it was too early to know for sure.

($1 = 1.5601 Australian dollars)

(Reporting by Peter Hobson; Editing by Sam Holmes)