China is developing a taste for NZ whites. What does this mean for Australian producers?

Despite double-digit declines in both volume and value, New Zealand’s wine exports to China increased by both value and volume in what was described by Clive Jones and Fabian Yukich - Chair and Deputy Chair of the New Zealand Winegrowers Association - as “a rollercoaster ride over the past 12 months.”

The results, published in the New Zealand Winegrowers Association’s Annual report, reveal Mainland China to have increased 5.2% by value to NZ $38.2 million (AUD $34.5 million), and 0.7% by volume to a total of 2,762 million litres. This positions New Zealand’s 2024 wine exports into Mainland China as the greatest by volume from the past decade, and the most valuable since 2019. The news also comes at a time of reduced wine consumption in Mainland China, with Peter Bailey, Wine Australia’s Manager of Market Insights, warning that “consumption of both domestic and imported wines in mainland China is less than a third of what it was six years ago.”

Despite achieving success in the contracting market, it is important to note that New Zealand’s export volumes are minimal when compared against both other wine exporters into mainland China and against other New Zealand wine export markets. Australia, China’s number one wine supplier, imported 33 million litres of wine worth $400 million into China in the 12 months up to June 2024. In the same year, New Zealand’s most valuable export market by both value and volume was the US, which imported 97 million litres at a value of more than AUD $700 million.

Currently, Mainland China is New Zealand’s seventh most important wine export market.

“In our key markets, such as the USA and UK, sales of New Zealand wine have grown in the past year, despite flat or declining markets for wine overall,” said Clive Jones and Fabian Yukich, Chair and Deputy Chair, in the New Zealand Winegrowers Association’s Annual report.

“Overall, for the June year end, exports totalled $2.1 billion—the second-highest annual level for the industry, but still down 11% on last year’s record-setting level.”

Perhaps most interestingly, white wine represented four out of every five bottles of New Zealand wine exported into China in the year up to June. Furthermore, New Zealand white wine exports into China achieved a higher average price per litre than that of the US, the UK, Australia, Canada, Germany and Ireland; New Zealand’s six more valuable export markets.

This reinforces the views of Australia’s wine industry previously published in this Drinks Trade article.

“One thing that I've noticed is, you know, this bit of a myth that they don't drink a lot of white wine: I think that's rubbish, I think that's really changing,” Howard Park’s Sales Director Richard Burch told Drinks Trade.

Jonathan O’Neill, General Manager of Sevenhills wine, added that “people are trying dry white and they are buying it. I think the palates are changing in this market and also obviously other markets around as well.”

This presents significant potential for Australian wine producers exporting into China to either change or add to their portfolio.

Travis Fuller, Managing Director of Kilikanoon Wines, says that "Riesling rules supreme.

“It’s taken a while to catch up but now Riesling is growing quickly as again consumers enjoy the young, bright, fresh flavours that are afforded by the varietal," he added.

Richard Burch has also noticed growing demand for Riesling at Howard Park.

“We've seen really strong interest in white wines/aromatic whites. Particularly for us in Margaret River and the Great Southern, that would be Chardonnay, Riesling and our Sauvignon Blanc Semillon, so they've been really popular wines," he said.

"Of course, reds will always be popular, but there's a noticeable shift in that interest, which is good.”

In the same year up to June, New Zealand’s wine exports into Australia dropped significantly, decreasing 18% by value to a work of approximately AUD $440.8 million and more than 10 million litres by volume to a total of 69 million litres.

Similar decreases occurred in New Zealand exports into the US and the UK, the two markets more important to New Zealand wine than Australia.

Reviewing this data, it’s important to recognise New Zealand’s reliance on export success, with almost 90% of all new Zealand wine sales occurring overseas. This positions it as the most export-focused of all major wine producers.

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To review the full New Zealand Winegrowers Association’s Annual report, click here.