Australia’s oversupply of wine tops 2.8bn bottles in wake of China trade dispute

Sydney: Apna Punjab Media: Australia has an oversupply equivalent to more than 2.8bn bottles of wine – a little more than 100 bottles per person – after the trade dispute with China slashed exports to the biggest consumer of Australian wines.
The excess wine is being stored in large steel vats in wineries across Australia, equating to 859 Olympic wine-filled swimming pools.
The removal of Chinese tariffs on Australian barley has some grape growers optimistic that the five-year wine tariffs implemented in 2021 may be dropped early, but a new Rabobank report suggests even this would not be enough to prevent further years of oversupply.
Pia Piggott, the report’s author and an associate analyst for RaboResearch, said: “During Covid, we had logistics bottlenecks and high shipping costs and weren’t … able to grow much in other markets.
Even if the China tariff hadn’t happened, if the shipping situation had been better and the cost had been better … the oversupply would have been less severe.”
At its peak in 2020, export of Australian wine to China was valued at $1.2bn and made up 18% of export volume and 40% of value. Now annual exports are worth just $8.1m, contributing to a plummeting price for red varieties of grapes and a decline in domestic red wine prices.