The report is another sign of the importance of the trading relationship between China and Australia. The value of Australian wine exports to China last year was almost three times greater than the number two market, the United States, which eased one per cent to $419 million.
The $2.91 billion total exports figure was a post-GFC high and is just shy of the $3 billion record tapped in 2007.
“Looking ahead into 2020, we anticipate that coronavirus will have an impact on sales, particularly to China, but at this stage it is difficult to predict the degree of that impact,” said Wine Australia chief executive Andreas Clark.
“Also, our first concern is people’s well-being in China and elsewhere and there will be time down the track to consider other impacts,” he said.
Mr Clark said while coronavirus would “create some headwinds, we don’t know for how long”.
He said a range of factors were likely to combine to affect wine sales in China this year, but suggested the “primary” impact was that “people aren’t socialising as much as they ordinarily would. And people are being encouraged to stay at home as much as possible, and that’s going to clearly impact the dining scene and therefore consumption of wine”.
Treasury Wine Estates, Australia’s biggest wine company and major exporter, has been cautious when commenting on coronavirus. Treasury chief executive Michael Clarke last month said it would be “premature” to try forecasting what impact the virus would have on its numbers, adding Treasury had a “watching brief” on the situation.
The new wine export figures also showed that Australia consolidated its position as the top exporter of wine to China in 2019, capturing a hefty 35 per cent market share, followed by France with 29 per cent.
But the likelihood of coronavirus affecting sales in China highlights the mixed news facing the industry.
Bushfires have savaged south-eastern Australia for months, and some vineyards are losing tourism dollars because of the crisis, while serious concerns are also held about the potential for bushfire smoke tainting wine grapes.
NSW wine producer Tulloch recently said it had taken the “very difficult decision” not to pick any Shiraz fruit from the Hunter region this vintage.
“We have been working closely with the Australian Wine Research Institute and sending all our fruit for testing for smoke taint compounds, combined with conducting micro-ferments in the winery and sensory evaluation. The wines we will make have passed these tests, but the necessity for extended skin contact for red wines and the potential for adverse smoke taint, presents too great a risk,” Christina Tulloch told customers in late January.
The Hunter Valley Wine & Tourism Association recently said the region had suffered a $42 million loss in tourism revenue in just three months because of bushfires. It said the wine region faced the “triple threats” of bushfire, drought and smoke taint.
Darren is the mining and agribusiness reporter for The Age and The Sydney Morning Herald.