(Read 2.8 billion (not million) bottles §3)

by Praveen Menon

SYDNEY (Reuters) – Australia’s wine industry is facing an oversupply problem that is expected to take several years to resolve, experts say, pointing to Chinese tariffs, high production and bottlenecks at export during the COVID-19 pandemic.

The country’s vineyards have enough wine to fill 859 Olympic swimming pools, the financial institution Rabobank commented this week in its third quarter report.

“That’s more than two billion liters of wine, or more than 2.8 billion bottles,” RaboResearch analyst Pia Piggott said, adding that the reserves were driving down prices, especially those of commercial red wines.

Relations with China’s main trading partner deteriorated in 2020 after Australia requested an investigation into the origins of COVID-19, which Beijing responded with additional import duties on wine and wine. australian barley.

These measures have hit the wine industry hard, with exports to China barely reaching A$8.1 billion in the 12 months to June, after peaking at A$1.2 billion in of the year to the end of January 2020, when the pandemic began to take hold.

“No other market can quickly offset the Chinese market,” said Lee McLean, chief executive of industry body Australian Grape & Wine, due to the Chinese market’s high consumption of red wine.

Diversification into markets such as Britain, Europe, the United States and other countries in Asia would take time to bear fruit, the chief executive added.

China, which has traditionally been an avid buyer of Australian commodities, including iron ore, has resumed buying coal and timber this year as tensions between the two countries have eased since the Labor Party of centre-left took power in Australia last year.

(Report Praveen Menon; Nathan Vifflin, editing by Kate Entringer)

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