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South Australia targets emerging Asian markets following China uncertainty

Published:  24 November, 2020

A South Australian program has been launched to help open up access to markets in Japan, Malaysia, South Korea and India in the wake of continued uncertainty around shipments to China.

The South Australian Wine Industry Association (SAWIA) today announced the new export-focused project will help small and medium wine businesses diversify into emerging Asian markets.

The Emerging Markets Program will develop a series of resources to help equip wine businesses with the tools and opportunities in order to reach new customers, while also providing education for decision-makers in each market, including wine importers, buyers, distributors and hospitality professionals. Each resource will consist of a market overview of each country, information about sales channels, an in-depth consumer profile and a guide to doing business in each market providing know-how on what to expect and how to prepare.

“We’ll also provide case studies, a guide to conducting tastings and explore traditional wine and food pairings in each market,” SAWIA chief executive Brian Smedley said.

“If they then decide to travel to those markets or engage with them virtually, they will be aware of the tips and traps that they might face and be able to showcase their wine to interested persons in a structured way.

“This program is welcome good news for South Australian wine businesses given uncertainty in some of our existing export markets.”

2019 was a bumper year for Australian wine exports but 2020 is shaping to be much quieter. Image: Wine Australia

The program comes at a time when exports to China – Australia’s biggest offshore wine market – continues to come under threat.

In August, China announced it had launched an anti-dumping investigation, with government officials asking companies like Penfolds parent company Treasury Wine Estates and Casella Family Wines to provide information.

A second investigation was subsequently launched by the Chinese government into countervailing duties. This second probe involved the same companies with the addition of Jacob’s Creek producer, Pernod Ricard.

China is yet to officially announce the outcome of the investigations or any potential penalties. However, there remains much uncertainty for South Australian wine companies.

Smedley said: “There are a lot of situations where companies have decided to cease shipments until the certainty becomes known. We’ve also had instances of importers cancelling orders. There would have been shipments on the docks at the time, on the water and there would have been some being prepared for shipment.

“There have been some cleared to warehouses and some that haven’t been cleared. Almost all the permutations you can think about, that’s what’s happened.”

The new export program will be rolled out one country at a time, starting with Japan potentially before the end of the year.

It is being launched in a partnership with the South Australian Government Department of Trade and Investment, with the full set of resources expected to be available by June 2021.

The program should come as a “timely reminder” that there were other potentially lucrative Asian markets available to small and medium SA wine businesses, Smedley said.

South Australia exports to 100 countries around the globe. It accounts for around 50% of Australia’s wine output and 80% of its premium wine exports.

According to Wine Australia figures released last month, Australia exported almost AU$3 billion worth of wine in the 12 months to 30 September with China accounting for AU$1.26 billion of that sum.

Japan is Australia’s eighth-largest export market while Malaysia, India and South Korea all fall outside the top 10.

Trade and investment minister Stephen Patterson said there were huge opportunities for wine producers to enter new markets including Japan, Malaysia, South Korea and India, which were regions of focus for Premier Steven Marshall's government.

“South Australian wine is regarded as some of the best in the world and upskilling wine producers with market intelligence will assist them in understanding consumers, sales channels and provide great insight into doing business in each of these regions,” he said.