The speed with which China has become Australia’s largest wine market (by value) is extraordinary.

In calendar 2000 China imported $1.34 million of our wine; by 2016 it reached $520m, three months later in March it had reached $568m, a year-on-year growth of 41 per cent.

France is its leading supplier, with 44 per cent of the market, Australia is second with 25 per cent, and Chile (with a long-standing free trade agreement) third with 16 per cent. Chile’s exports (largely bulk) are declining, and Australia’s growth rate is greater than that of France. Wheels of all sorts are driving the dynamics, some more obvious than others.

The two-way trade of products and services between China and Australia is many times greater than that between China and France. More Chinese arrive in Australia every day than any other country. Chinese returning home become brand ambassadors for wine and its use in everyday living.

Despite all this, the Chinese wine market is immature.

While there is a thirst for knowledge evidenced by the many wine courses now run in China — the multi-level British Wine and Spirit Education Trust course is most important — a large gap still exists between theory and application.

Even for some hoping to become professionals (sommeliers, writers, teachers, retailers), having a glass with meals at home for casual enjoyment can still be a step too far, but not on the basis of gender. On a trip to China in May, Wine Australia arranged for 15 Chinese wine professionals (of varying experience) to each ask me one question. All were in their 20s or 30s, and all but one were female. But the statistics don’t lie. The middle and middle-upper classes who live in one of the hundred cities with a population of more than one million, have the income to fund ever-increasing consumption.

At the other end of the scale is the demand for high quality South Australian shiraz, led by Penfolds Grange and its other luxury brands.

These wines are purely aspirational for upper-middle-class buyers, but well within the reach of the millions of wealthy consumers. Treasury Wine Estates’ share price is a direct reflection of this. Then there is the so far largely ignored white wine sector. The split is 88 per cent red wine, 12 per cent white, utterly at odds with the greater compatibility of white wines with cuisine and all but winter temperatures.

Source: The Australian Business Review. Date: 2017-07-26