Coronavirus: China’s appetite for Australian wine cools as outbreak saps demand

Wine sales between China and Australia have been hit hard by the pandemic, with well-known Australian winemaker Penfolds offering large discounts

Other retail businesses which count on Chinese tourists and retail consumers have also been forced to close retail stores

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With the coronavirus spreading fast globally, the remainder of 2020 is only going to get worse for wine sellers, according to Rabobank’s senior wine industry analyst Hayden Higgins. Photo: Shutterstock

Published: 4:30pm, 26 Mar 2020Updated: 10:37pm, 26 Mar 2020

On Monday, a sales call between a Chinese property developer in Sydney and well-known Australian winemaker Penfolds did not last long.

The customer, who appeared on Penfolds’ VIP database, was offered discounts on specific wine collections. This included one of the label’s well-known products, the Bin 28 Kalimna Shiraz, for roughly A$28 (US$16.8) depending on the year, or around a 40 per cent discount. Bottles over different years are priced around A$50 per bottle in retail stores.

The executive, though, did not need any top-end alcohol as he had already been forced to cancel all his corporate events as a result of the coronavirus outbreak. The call did not appear to have been made to a large number of Penfolds’ top clients and the company declined to comment on its specific discount strategies. It is understood the company has not changed its usual marketing plans.

Wine sales have been one of the more popular retail trades between China and Australia to be hit hardest by the pandemic. This added to existing industry pressures from falling sales, a build-up in inventory and the ongoing drought made worse by Australia’s bush fires which raged for over six months until February. Australia's wine trade with China had already been destabilised due to trade tensions between the United States and China.

The coronavirus outbreak is not only affecting actual consumption and trade flows of all goods, including wine, at the moment, but its economic consequences may undermine demand for wine even after the disease subsides

Hayden Higgins

And with the virus spreading fast globally, the remainder of 2020 is only going to get worse for wine sellers, according to Rabobank’s senior wine industry analyst Hayden Higgins.

Coronavirus: China’s appetite for Australian wine cools as outbreak saps demand

Wine sales between China and Australia have been hit hard by the pandemic, with well-known Australian winemaker Penfolds offering large discounts Other retail businesses which count on Chinese tourists and retail consumers have also been forced to close retail stores

Wine sales between China and Australia have been hit hard by the pandemic, with well-known Australian winemaker Penfolds offering large discounts

Other retail businesses which count on Chinese tourists and retail consumers have also been forced to close retail stores