While Wine Australia was trumpeting our growing export results in its February bulletin [www.wineaustralia.com/news/market-bulletin/issue-187] there was no mention of the likely impact of the Coronavirus.
To me this seems a bit like bragging about having scored dinner at the Captain’s table on the last night of the Titanic. That is, interesting but not in any way helpful. What would have been of much greater help would be a guide to the potential impact of the virus on exports to China. I know they will say that they did not want to spread panic, but a dose of realism would be much appreciated by many of our wineries.
I am not trying to create panic, rather inject a dose of reality. My wife and I run a little business assisting small/new exporter wineries with shipping their wine to various countries in Asia. In the 14 years that we have been doing this, we have shipped just over 700 containers of wine to China on our client’s behalf. As an aside, for the last two years I have been suggesting that wineries look at other countries in Asia so as not to have too many eggs in the, “China basket”.
Normally straight after Chinese New Year some of our clients start receiving refill orders to replace the stocks of their wines sold for the festivities – however, this year not a single order so far.
Whilst the Australian Government has travel bans in place for China, it does not have any export bans. However, just about everything in China has closed down, so there is no demand for Aussie goods – as the South Australian lobster growers found out before Chinese New Year, when they got left with tens of millions of dollars’ worth of lobsters grown specially for this celebration that they could not ship. Ouch!
Already there is a growing list of shows and events in China which are being deferred, thereby delaying/reducing the opportunities for Australian wineries to obtain export orders, not only to China but also too much of the rest of Asia which normally attend these events.
The effect of the virus goes much further than this, in that many, if not most manufacturing businesses in China are currently closed either voluntarily or at the behest of the Government. The impact of this will be felt right across Australia as most of the annual AU$86 billion worth of imports from China have ceased. If the virus alert continues until the middle of the year (which is quite likely) that means that around AU$40-$50 billion worth of imports from China will not make it to our shores. This ranges from high tech machinery and components down to the stuff in the local two-dollar shop. Imagine the impact of sucking AU$40 billion worth of inputs out of our economy? So what could it be like trying to buy a toaster or a kettle later this year if the current situation continues for much longer, let alone a new computer or smart phone!!
Those of you who tried to buy an air-purifier during the bushfire smoke crisis will know what I am talking about. Just after Christmas Harvey Norman Queanbeyan’s computer showed they had minus 76 of the expensive Dyson air purifiers in stock – i.e. they had 76 more customers than gadgets! At a guess they probably only sell 3-5 units a month normally. People were buying them here in Adelaide and shipping them across to Canberra.
The impact of this virus goes much further with no Chinese tourist/business people currently coming to Australia. The impact on our Universities of not having tens of thousands of Chinese students here has been well documented, but how about the flow on effect to restaurants, tourism and wine sales? There have been good reasons why an increasing number of cellar doors/wineries have been employing Chinese speaking staff – but what now??
If this emergency goes on for much longer, its impact on our wine industry could rival or even exceed that of the GFC. Do you have plans/strategies on how to cope/handle this situation?
On a positive note all Austrade’s offices in China and Hong Kong are fully staffed, with the staff operating from home rather than in the office.
So now is the time to think and re-evaluate your current strategy rather than keep on going, “same old, same old”. That is exactly what we are doing right now as we face the strong possibility of losing around 80% of our revenue in at least the short-term.
Think it through!
STOP PRESS: Unofficial figures for Jan-Feb 2020 show a 90% drop (from the same time the previous year) in Australian wine sales to China!!
THIS WEEK’S WINE REVIEW:
This week I am looking at the exciting new (emerging) Portuguese white variety called, Arinto. Luckily, unlike many other new varieties, this one is easy to pronounce, which should help sales.
Just as an aside: It baffles me why Aussie winemakers label their wines as Mourvèdre instead of the much more consumer friendly Mataro (Australian) or Monastrell (Spanish). It is harder for people to remember, let alone spell. So they make a great wine and give it a hard to remember name that is even more challenging to spell.
So back to the easy-to-say (and remember) Portuguese Arinto – hey, even it has eighteen synonyms! Arinto is known for its high acidity and attractive lemon characters. It is fairly widely grown in Portugal and is included in the country’s famous Vinho Verde (Green wine) which is world famous as a grand aperitif and brilliant accompaniment to fresh seafood.
There are seven producers in Australia so far. Today’s wine comes from the Mediterranean variety specialists, Dell’uva Wines. This is just one of thirty odd Mediterranean varieties they are growing – so far. www.delluvawines.com.au
The Dell’uva 2017 Barossa Valley Arinto – has beguiling aromas of florals and rose petals. A lovely zesty, crisp palate with plenty of lemon and lime flavours, crisp acidity and a delightful, zingy finish. This wine is great as an aperitif but really comes into its own when accompanying seafood, which it does sublimely. Bloody gorgeous and easy to remember!!