Chinese drinkers are showing an increasing thirst for Australian wines, making them the toast of exporters whose businesses are benefitting from the discerning palates of the country’s growing middle class and a multitude of buying options.

Australian wine exports to China grew 51 per cent in the 12 months up to September last year, making Australia the top exporter to China by value and second by volume, after France. China in turn is Australia’s top market, surpassing the United States last year.

China’s growing middle class, its varied and increasingly sophisticated market and a wealth of online buying options – offered by websites such as yesmywine.com and wine-world.com – are driving the growth, which has risen from A$27 million (HK$160 million) 10 years ago to A$474 million.

Also fuelling the growth is a reduction in tariffs. From January 1, these fell to 5.6 per cent under the China-Australia Free Trade Agreement (ChAFTA). Prior to ChAFTA, they were 14 per cent.They will be zero by 2019.

The market for overseas wine in China took a hit in 2012 when the Communist Party banned extravagant gift-giving by officials in an effort to cut corruption. Australian wine exports to China hit a low in 2014, but that blip, which mainly affected the premium end of the market, has been corrected.

Jim Boyce, who runs the Grape Wall of China blog, told This Week in Asia: “[2012] wiped out a large swath of the market, but consumer buying has now filled that vacuum and led us to a much healthier scene. Consumers are increasingly knowledgeable about wine.”

He said Australia would do well, despite a glut of Bordeaux that Chinese buyers were no longer so keen on, as the country was “seen as a source of trustworthy products, something of massive importance in China where consumers have grave concerns about food safety ... Add to that the Australian wine sold in China tends to be fresh and fruity – ‘bottled sunshine’, as they say”.

Read more at source: This Week In Asia