Margaret River wine producers see big future in exports to China as demand grows


Margaret River wine producers see big future in exports to China as demand grows
  1. Margaret River wine producers see big future in exports to China as demand grows
    abc.net.au
    Demand for Australian wine is surging in China and tipped to grow to 35 million consumers within five years prompting WA winemakers to set up stores that only sell Margaret River…
    Western Australia
AM By Anthony Pancia Watershed wines managing director Geoff Barrett and Zhongshan outlet director Lili Huang Photo: Watershed wines managing director Geoff Barrett and Zhongshan outlet director Lili Huang (ABC News: Anthony Pancia)

China is now the biggest export destination for Australian wine, and Margaret River winemakers are hopeful for their future in a market tipped to grow to 35 million consumers within five years.

Key points:

  • WA winemakers have set up four Chinese stores that only sell Margaret River wine
  • Plans to open another six by year's end, and up to 300 within three years
  • Experts say China is already consuming more wine than the US

And Chinese customers are not after just any Australian drop, they are want premium bottles and brands.

Audio: Listen to Anthony Pancia's story (AM)

So much so that the West Australian winemakers have set up Chinese stores that only sell Margaret River wine.

The 14 winemakers, ranging from some of the region's smallest to biggest, are stocking their product in four stores branded "Margaret River Wines" in China.

And there are plans afoot to open another six by year's end, and up to 300 within three years.

Wine writers and experts say China is already consuming more wine than the United States, with its emerging middle class also developing a "desire to learn more about wine" at an "extraordinary" rate.

One of the participating producers, Robert Karri-Davies, said he was already taken steps to increase yield in his "relatively small vineyard" to accommodate the anticipated growth in sales in China.

"We're expecting to increase our China market by a good 50 per cent," Mr Karri-Davies said.

Robert Karri-Davies, a Margaret River winemaker Photo: Robert Karri-Davies says he'll increase yields to service the growing Chinese market (ABC News: Anthony Pancia)

"This year we crushed more than we have ever crushed before in anticipation that in two years' time, we will have enough to service the market," he said.

Demand driven by emerging middle class

Wine writer for Seven West Media, Ray Jordon, said much of China's interest in wines was being driven by an emerging middle class looking for alternatives to traditional high-strength Chinese spirits.

"The degree that the Chinese market is growing is quite extraordinary, and there is a genuinely strong interest in wine, and red wine in particular," Mr Jordon said.

"By establishing a stake in the ground these winemakers are putting themselves in a position to put their brand in front of an increasingly savvy market.

"And present their wines in appropriate surroundings and circumstances that is so important for the Chinese consumer."

Robert Karri-Davies holds grapes from his winemaking crop Photo: Robert Karri-Davies produces an average of 2,000 pallets of wine per year. (ABC News: Anthony Pancia)

Mr Jordon also said Chinese consumers had historically been interested in the prestige associated with big name brands, and despite its relative infancy, wines produced in Margaret River did "fit the bill".

"The Chinese would see the Margaret River wines and see that brand as one of the ones that has a good reputation with good quality," he said.

"Certainly the red wines that are being made in Margaret River these days really fit the bill.

"To some degree — although a lesser extent than in previous generations — there is a lot of interest in what is brought to the table — in particular [at] business meetings.

"So having a brand with a bit of clout does auger well for a strong foothold in the Chinese market."

Watershed wines managing director Geoff Barrett said they anticipated there would be up to 35 million new wine consumers in China within five years.

And he said it was "not unreasonable" for Australian wines to fetch an average of $30 per bottle.

"There's no question that Chinese consumers are prepared to pay the right price for h…