How large could Australia’s wine exports to China be by 2018?

There’s much talk about China being the world’s fastest-growing market for wine, but little analysis of how large it might become relative to other Asian markets, in what price segments, and supplied by whom. The growth in Asian wine export opportunities in the past few years coincided with an appreciation of Australia’s currency, which weakened our competitiveness abroad and reduced foreign interest in investing in Australian wineries. Certainly the 10+% fall in the AUD in recent months (see Figure 1), if sustained, could reverse that decline in competitiveness – but it is coinciding with a slowdown in Asian income growth and a rapid expansion in domestic wine production in China