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China's growing love of Australian wine

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In 2016 China became the single biggest market for Australian wine. But Australian exporters have to compete with growing competition from Chinese winemakers and their lavish wine chateaux.

It's not what you expect to see at a swish winery on the outskirts of Brisbane - a large bus emblazoned with a giant photo of 'wildlife warrior' Steve Irwin.

When the bus pulls up at Sirromet Winery, around 30 excited Chinese tourists step off - ready for a couple of hours of wine-tasting and buying.

The winery is one of many around Australia that is capitalising on record numbers of Chinese tourists visiting the country.

Chinese woman drinking wine.
The face of China's new wine drinkers: young, middle-class, educated.

ABC: Prue Adams

The latest figures released by Tourism Australia reveal, for the first time, the Chinese outnumbered New Zealanders entering Australia last year - bumping them up into first place in terms of visitor numbers.

About 1,415,000 people from Greater China, including Hong Kong, entered during 2016, spending more than $10 billion while they were here.

The statistics show sampling Australian wine and food is high on their list of priorities.

"Tourism accounts for 30 to 40 per cent of our total export business," says Sirommet's Business Development Manager, Greater China, Eric Yu.

Mr Yu says the Queensland company started welcoming tourists to the cellar door 10 years ago and now around 6,000 Chinese tourists come through each year.

Tour guides speaking in English, Chinese and Japanese demonstrate how the wine is made, explain flavour profiles and offer tastings. Visitors can buy wine and take it home with them or have it delivered directly to their home in China or Japan.

"I would say 20 per cent would remain our customers but we have to continue to maintain that relationship with them so they continue to buy from us," Mr Yu says.

"Our Chinese guests still prefer red wines, but we are also seeing fast-growing demand for the whites and sweet wines as well."

- Eric Yu

In 2016, China became the single biggest market for Australian wine.

According to data collected by Wine Australia, around $520 million worth of Australian wine was sold in China last year, representing a 40 per cent increase on the year before.

"The success story has been amazing," says Wine Australia CEO, Andreas Clark.

"China has been our fastest growth story over the past five years, and it is our number one market."

- Andreas Clark

Ten years ago, sales to China were worth just $20 million, now they are worth more than half a billion dollars.

Andreas says there are more than 1,200 Australian wine exporters to China, and the most prominent brands are Penfolds, owned by Treasury Wine Estates (TWE), and Jacob's Creek, now part of the Pernod Ricard stable.

TWE's Robert Foye claims the company he represents is "the biggest brand builder in the wine business in China".

While the Chinese are taking up wine drinking at a rapid rate, wine consumption still only accounts for around four per cent of the total alcohol consumed, according to Andreas Clark.

Beer and a potent locally-made spirit called Baiju are the main drinks of choice.

It means there is great potential for growth in wine consumption, and much of the wine consumed will come from countries other than China.

Grape pickers in Shandong province
Grape harvesting in China is labour intensive and often done by older workers.

ABC: Prue Adams

There is a substantial wine industry in China but it's widely believed the country will never be able to produce as much as it consumes.

"I don't believe the Chinese wine industry can produce as much as we need, because the climate situation is quite difficult for making wine in China," says Beijing-based international wine judge, Professor Li Demei.

At many vineyards, particularly in the country's north, the grape vines need to be buried before winter so they don't freeze in the intense cold.

Ningxia, a region in China's North West, is thought to make some of the country's best wines, but Shandong province, south east of Beijing, is considered the birthplace of China's modern wine industry.

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It's in Shandong where you find many of the extravagant wine chateaux - recently-built constructions designed to look like the oldest wineries in France.

The Changyu Pioneer wine company is China's oldest and biggest winery, producing around half a billion bottles of wine and brandy a year; the company also has eight grand chateaux dotted around the country - three of them at Yantai in Shandong.

The wine chateaux in China are eye-catching magnets for tourists - an impressive first impression for people who want to try wine and maybe buy.

The Viticulture Professor at China Agricultural University warns that an extravagant chateau doesn't necessarily equate to the best quality wine.

Dr Huiqin Ma says many of the wineries, particularly in Ningxia, are turning away from the grand facades and focussing on making better wine.

"The last three years, many of the wineries are more practical," she says.

"They are more friendly to the normal consumers, meaning their wines are not that expensive - they are not big scale and create a sort of family atmosphere."

- Dr Huigin Ma

Find out more about the future of wine in China on Landline on Australia Plus TV on Sunday 12 February. HK Times: 06:00, 14:30 & 22:30
And if you missed Landline's Window on China special see the stories on their website.

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