Liquor store retailers say prices of bottled Australian wine are likely to fall over time, as about 800 wine producers who had been exporting a combined $1.3 billion in wine to China scramble to redirect a large chunk back into the local market.
Anthony D’Anna, co-owner of Boccaccio Cellars in Melbourne’s leafy suburb of Balwyn, said wine buyers were set for a golden period during which the availability of higher-end wines would broaden and prices were likely to come down.
But he warned it would not be easy for big wine producers to fully win back Australian customers because there had been some resentment about high prices and the scarcity of allocations over the past few years, when winemakers viewed the lucrative China market as a priority.
Some high-end drinkers had shifted to Italian and French brands.
‘‘Consumers started to look at other wines and other trends,’’ he said. ‘‘They realised they could get a good French wine from Bordeaux for a similar price.’’
Mr D’Anna said the price of wines such as Penfolds Bin 389 had moved up to around the $100 mark at some retailers. Treasury Wine Estates, which represents about 40 per cent of total Australian wine exports to China, is hardest hit by the provisional tariffs of between 107 per cent and 212 per cent because of the sheer size of its business.
The Penfolds luxury range is headed by Penfolds Grange but also includes brands such as Penfolds Bin 389, Bin 707, Bin 407 and St Henri. Treasury sells $500 million-plus of wine to China and it is highly profitable, with margins of 39.5 per cent, almost double that of Australia and triple that of the US.
Treasury Wines chief executive Tim Ford vowed in November there would be no discounting to shift product.
Mr D’Anna said: ‘‘It’s not going to be an easy transition back.’’
He said the sheer volume of wine trying to find a new home meant serious wine drinkers would have the opportunity to restock their cellars, with some keen pricing expected across the market. ‘‘Absolutely there’s going to be some good bargains coming,’’ he said.
Michael Andrewartha, co-owner of East End Cellars in Adelaide, said he expected a flood of wine company sales representatives would be knocking on his door trying to sell extra ranges.
‘‘What we will see is a whole lot of new reps banging the door down,’’ Mr Andrewartha said.
‘‘It’s a bit late to spread your wings.’’
He also said there had been a shift by more affluent drinkers to French and Italian prestige wines and there was room for big companies like Treasury Wines to try and snare some of that back. ‘‘I daresay Treasury will be a lot nicer to the locals,’’ he said. Dean Taylor, the chief executive of ASXlisted Digital Wine Ventures, which operates the WineDepot online business, said most of the bargains would be at the lower end of the market initially because of the low-yielding 2020 grape harvest, which was hit by poor weather conditions.
Some wine companies were unable to make certain wines because vineyards in regions such as the Hunter Valley were affected by smoke taint from bushfires.
‘‘There will be some extra supply because of failed export orders,’’ Mr Taylor said.
‘‘There will be the odd bargain coming through, but more at the lower end.’’
But the low 2020 vintage would temper an immediate effect because of the limited quantities produced across Australia compared with other years.
Over the next few years the supply and demand equation would tilt back towards the consumer, he said.
‘‘I don’t think it’s going to be too much different in the very short term,’’ Mr Taylor said.
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