After a brief but explosive resurgence, Australia’s wine exports to China are beginning to lose steam — and the reasons go far beyond simple trade statistics.
In March 2024, China officially lifted the crushing tariffs it had imposed on Australian wine during a political standoff that began in 2020. That move unlocked a flood of shipments from Australian wineries, reigniting hopes of rekindled trade ties. Between April 2024 and March 2025, wine exports from Australia to China surged to A$1 billion (about $640 million USD), nearly matching the record A$1.15 billion set before the trade tensions began.
But despite the promising start, the momentum has started to fizzle. In the first quarter of 2025, Australian wine exports to China dropped to just A$126 million — the lowest for that period since 2016. This suggests that the initial surge was likely a restocking rush rather than a sign of sustained growth.
China, once the golden goose for Australian winemakers, is no longer consuming wine like it used to. The country’s overall wine imports have been in steady decline since 2018. Although the influx of Australian wine in 2024 did push China’s total wine imports up for the first time in six years, imports from other traditional wine suppliers like France, Chile, and Italy have continued to nosedive.
“There definitely has been a slowdown,” said Peter Bailey, Market Insights Manager at Wine Australia. “Australia has performed exceptionally well to get to a billion dollars, but continued growth is not guaranteed.”
Several factors are driving this shift. Chinese consumers are showing a growing preference for premium, smaller-batch wines — a stark contrast to the larger volumes Australia used to supply. This means that although exports have resumed, they’re made up of fewer bottles at higher price points. That’s cold comfort to Australian winemakers still grappling with a massive oversupply problem back home.
The wine glut in Australia, exacerbated by years of limited access to the Chinese market, has led to plummeting grape prices and the mass destruction of vineyards. Thousands of hectares of vines have been uprooted in a desperate effort to rebalance the supply-demand scale.
Making matters worse, Australia’s wine exports to the rest of the world have also declined over the past year. This limits alternative markets that could have absorbed the excess stock.
There may be a silver lining, however. China has maintained tariffs on U.S. wines, which could offer Australia an advantage, potentially taking over the U.S.’s $50 million share of the Chinese wine market. Additionally, shifting preferences in Canada — moving away from American wines — might open another opportunity.
But for now, the excitement over the re-opening of the Chinese market appears to be settling into a more sober reality: one where long-term growth is uncertain and reliant on changing global tastes and trade dynamics.
