• The skies may be clearing up for Australian wine exports to China. (SBS)
China’s austerity measures have continued to hurt luxury imports and Australian wine is no exception – so is the middle class the answer?
By
Ryan Emery

Source:
14 Aug 2014 - 10:39 AM  UPDATED 14 Aug 2014 - 7:43 PM

Just as we once rode the sheep’s back, Australia has enjoyed great economic success onboard the rampaging Chinese tiger.

Australian premium wines were along for the ride.

But then President Xi Jinping took on party corruption and introduced austerity measures that led to a dramatic fall in "gift giving".

Premium wine, particularly red, is a popular status symbol.

Australian industry and Chinese government figures show millions of dollars have been wiped off the import industry this year.

So the industry is settling in for the long haul pinning their hopes on the ever-growing Chinese middle class.

Voyager Estate cellar door manager Janine Carter says the Margaret River winery in Western Australia’s South West region enjoys a lot of Asian customers, but they know there’s work to be done to attract more Chinese visitors.

"China really is a slow burn," she says.

"It's going to be a long-term prospect. There needs to be a lot more education about wine, a lot more training, but what we're finding is the Chinese are interested.

"And so as they develop more of an interest in enjoying wine as a food and wine experience rather than just buying for gift giving or status then we'll start seeing the wine sales start to pick up again."

Voyager Estate is relatively new to the Chinese market and suffered a 15 per cent drop in first quarter sales this year due in part to the austerity measures.

But Janine Carter says it's still a healthy market.

"Our distributors in China are actually very positive and they're putting more people on the ground and investing into their team because they very firmly believe that the wine market in China has so much potential," she says.

Down the road, and Watershed Premium Wines has been trading in the Chinese market for more than a decade.

Managing director Geoff Barrett says the austerity measures have not affected his business, but one of his Chinese importers wasn't so lucky.

They imported more than 25,000 cases of top range wine last financial year.

"That importer had clearly made specific arrangements in China for the distribution of those wines and that arrangement fell over with the introduction of the austerity measures in China," he says..

"It's my understanding that the chairman of the company is drinking his way through the Awakening range, which is the top end range, and the balance of the wine is sitting securely in a warehouse."

Geoff Barrett says it's the Chinese middle class that will be the future for Australian wine now that the halcyon days of luxury imports are over.

"There is certainly over the last 12 - 18 months, an increased level of inquiry at the mid-range, in terms of our ranges, and price points, and I find that most encouraging and a real trend is emerging," he says.

Singaporean Chinese wine journalist Ch'ng Poh Tiong says there is no typical Chinese wine consumer although the super rich do seem more concerned with the right label, than the right taste.

"It's an utter fallacy to imagine that Chinese people like sweet wines," he says.

"Please don't try and make a wine to suit the Chinese palette because there's no such thing as a typical Chinese palette.

"North, south, east, west in China, the Chinese cuisines are different so this idea of trying to make a wine to suit the Chinese palette is, again, you're barking up the wrong tree."

Ch'ng Poh Tiong says Australian wines need to brand themselves according to their region, not their label.

He says Bordeaux wines from France are very popular in China, for example, and it would take a big label to stand out from the crowd.

"So you need to tell the big story, the big picture: ‘Margaret River wines are great’," he says.

"And then you fight for individual market share. But just the odd winery, unless the winery is so famous, internationally, going out doing the odd tasting once a year. That's not enough.

"You have to shout, sing the praises of the region after that you have your own little tune about how great your winery is. So that needs addressing quite seriously."