South Australia’s wine industry is on the road to recovery after an export plunge caused by COVID-19 restrictions in China.
Port of Melbourne figures show 4520 containers left the port between January 1 and March 30, compared to 6164 in the previous three-month period, and 15% less compared to the same quarter last year.
“It’s a disaster,” a representative from one of Australia’s biggest wine producers, who asked not to be named, told Crikey in February.
“Sales are off 90% for the first two months and there is no relief in sight. We are also expecting a lag effect.
“It is most likely that sales will take some time to come back on line — even when things appear to be back to normal there will be a backlog of stock in China to work through.”
Taylors Wines MD Mitchell Taylor told The Weekly Times the impact of the virus on his company’s sales hit home in March.
“We had all of our February and March orders to replenish stock (in China) put on hold,” he said. “In the end we didn’t do any export sales for three months. We’ve had ups and downs, but never a gap that long.”
Orders have since resumed, but Nick Waterman, president of the South Australian Wine Industry Association, told InDaily it’s been a tough battle for winemakers due to the export plunge.
Australian wine exports to China fell 14% from January to April, compared to the same time last year.
South Australia makes up 61% of the Australian export market to China and shutdown happened during Chinese New Year, the most lucrative wine-selling time in the country.
Changing habits after shutdown
At a recent China export webinar, Wu Ling, head of food and beverage for China’s TMall.com online retail site, discussed how habits have changed during COVID-19 lockdowns, with more customers buying online, but in smaller, cheaper packages.
“And as more people are buying online, the one making the decision is the housewife,” she said.
Waterman, who is also Yalumba Wine Company’s managing director, said the industry needed to hold its nerve in the China export market and stand firm on price points.
He noted that while more traditional markets are heading into recession, China is most likely to weather the impact of COVID-19 best.
“At the moment in China we have the highest, most premium price per litre,” he said.
“What we can’t do is panic and say the market in Australia, the UK, US and Europe has contracted, let’s go and chase China and drop our prices, we have to hold onto our position we have secured there.”
