Yahoo Finance Surprising item to get cheaper despite cost-of-living crisis
Australia is swimming in wine, experts say.
Australia has a wine problem, and it’s not the fact that we’re drinking too much of it (although, that is likely a problem too). We have too much of it.
Infact, Australia has so much red wine in storage, there is enough to fill 859 Olympic swimming pools. That’s more than 2 billion litres, or 2.8 billion bottles of wine in storage, according to Rabobank research.
And while that’s not great news for Aussie winemakers, it is good news for consumers, with prices expected to fall and oversupply issues set to last for years.
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Why do we have so much red wine?
Basically, China put tariffs in place, which impacted Australia’s ability to export wine to the country - and the Chinese market loves Australian wine.
So, Aussie winemakers have been creating enough supply for the local market and a whole bunch extra to service China and other international markets.
And, despite improving trade relations with China, Rabobank said - even in a “best case scenario” with tariffs removed this year, and Chinese consumption of Aussie wine recovering quickly - the Aussie wine industry would still face two years to work through the current wine surplus.
The Rabobank report said Chinese anti-dumping tariffs placed on Australian wine had led to significant disruptions for Australia’s wine industry, with our value of exports falling 33 per cent over the past two years.
“Driven by sustained economic growth, rising incomes, as well as the social status of wine drinking and gifting, global wine imports to China grew at an impressive 18 per cent compound annual growth rate in the decade up to 2017 – when they peaked at 750 million litres – elevating China to be a top five wine-importing nation globally,” RaboResearch associate analyst Pia Piggott said.
“In the four years following the China-Australia Free Trade Agreement in 2015, the tariff on Australian wine reduced from 14 per cent to zero per cent, helping to double Australia’s market share in China from 12 per cent to 24 per cent.”
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