Can you tell the difference between Australia and New Zealand (wine)?

Last week, I made a few observations about the relative behavior of Australians and New Zealanders, with respect to alcohol consumption. For example, the New Zealanders were reported to drink more often, but the Australians were more likely to get drunk, and then regret this outcome.

This comparison is relevant, because, in general, there is actually not all that much cultural difference between the two countries, at least compared to other English-speaking countries, such as Canada, South Africa, and the United Kingdom, plus the United States of America. However, in the wine world there are considerable differences, which I will look at here.

As an aside, back at the beginning of the last century, when Australia was being federated, to shake off the unwanted British yoke (officially, January 1 1901), the New Zealanders were offered the golden opportunity to become a state of Australia. They declined. This was unforgivable; and it has not yet been forgiven, even after a century. There is nothing better for Australians than beating the New Zealanders at any given sporting event, for example.

Therefore, it really rankles when we expat Australians read a report like this:

Little known. Since 2016, the U.S. has imported more wine from New Zealand than from Australia (by value) --  and the gap has been growing. In 2021, imports from NZL were 88% higher than those from AUS.

This is illustrated in the following graph (from the AAWE). New Zealand wine exports to the USA have been continually on the increase in value since 1992, while the Australian export values peaked in 2007, and have continually decreased since then. The point of equal US import value was in 2016.

This raises several questions. First: What is wrong with those Americans? After all, they are clearly wrong! Can’t they tell New Zealand wine from Australian wine? Surely not!! *

A second question relates to wine volume, as opposed to value. After all, the NZ increase may simply be that they are charging more for their wines. I will not go into this one here, but will, instead, look at another question: some declining Australian export values to other countries.

The obvious country, in this regard, is China. It has been noted that:

Australia exports wine to over 100 markets, but in 2020 the top 5 markets (Canada, China, Hong Kong, United Kingdom and United States) accounted for 75% of total wine export volume and 77% of export revenue. China was the largest in value terms, accounting for 33% of export revenue and ranking third in volume (after United Kingdom and United States) at 13%.

Well, all of that changed. This next graph shows the value of Australian wine exports to China plus the rest of the world, since 2002 (from Winetitles Media). Note that it indicates that Australian wine export value peaked at the end of 2007 (just as we saw for the USA, above), then declined until mid 2013, increasing again thereafter. It also shows that the largest component of the latter increase was exports specifically to China — so, that is where Australian wine went after the post-2007 declines.

The China exports peaked in 2020 and then (quite literally) crashed in 2021. Part of this decline has been a general decrease in wine consumption in China. This is illustrated by the AAWE graph showing that “from its peak in 2017, China’s wine consumption has decreased by more than 45%”. That is a pretty serious reduction.

However, the main reason for the vinous disaster has been the Chinese claim that the Australians had been dumping wine in China — ie. insisting that in order to receive this particular wine then the Chinese importer also had to buy this other wine as well (whether they wanted to or not). This has lead the Chinese to impose import tariffs of more than 200% on all Australian wine, in retaliation. **

Hence the crash, when combined with declining consumption. However, even in 2021 Australia still managed to be 5th in the value of wine imports in China, although 7th in volume (China’s wine imports 2021), after falling from a clear 1st place (see the table below).

It is therefore sad to note that: New Zealand wine export value hits all-time high. [Expletive deleted.]

A final question is: What are Australians doing about this? It has been noted that: Australia’s wine stock levels rise following 12 months of challenging global conditions; as loss of sales has not been compensated by reduced production. Indeed, the current vintage definitely has problems (Vintage 2023 not business as usual), concerning:

how winegrape growers can prepare for changes to their income when faced with oversupply issues, increases in shipping and freight costs, the ongoing impact of China’s wine trade tariff, and market values dropping, particularly with Shiraz and Cabernet sauvignon varieties.

Which winemaker would you rather be, just at the moment: an Australian or a New Zealander?

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*  In case Californians are wondering where their water has gone in the past few years, they should check out the reports of unusual floods that have occurred in south-eastern Australia during exactly that same period of time; and then think about the clockwise flows of air around the edge of the northern Pacific Ocean. A drought does not mean that the water has disappeared, but instead that it has gone somewhere else.

**  The alleged dumping was merely a point of political discussion, until an idiotic Australian politician suggested (in public) that China should be officially investigated about the origin of the current SARS-CoV-2 pandemic. Almost immediately, the tariffs were announced by an offended Chinese government. Indeed, no-one had suggested that the USA should be investigated about the origin of the H1N1 influenza pandemic of 2009, nor the so-called Spanish Flu of 1918 (the biggest pandemic on record); so why finger the Chinese this time? (Both flu viruses arose in Kansas,)