Australian winemakers look past Chinese, US woes and toast to home markets | Instant News

POKOLBIN, Australia (Reuters) – Faced with sluggish sales to major export markets, almost no foreign tourists, and a decline in restaurant sales due to COVID-19, Australian wineries are increasingly looking to locals to secure their livelihoods as the coronavirus subsides.

With overseas vacations just outside the box, locals visit cellar doors – or sections of wineries where visitors can sample a drink – like never before, says winemakers in the Hunter Valley wine region, 160 km (100 miles) north of Sydney.

“As far as our average sales are concerned, it has doubled (in the last few months),” said Bruce Tyrrell, managing director of Tyrrell’s Wines, adding they are adjusting their wine tasting service to comply with social distancing rules.

It comes as exports to China, which buy 40% of Australia’s wine exports, have been hit by deteriorating diplomatic ties during the coronavirus pandemic.

Meanwhile, Australia’s top winemakers have reported falling profits in the United States as they have to heavily discount products to compete in a market where supply exceeds demand hit by the coronavirus.

Australian wine exports fell 1% to A $ 2.84 billion ($ 2.02 billion) in the twelve months to June after several years of rapid growth, according to the government-backed Australian Wine industry body.

This was led by a sharp drop in Australian sales to China over the same period – up only 0.7% compared to the previous year’s 18% growth – while exports to the United States fell 0.4%.

Meanwhile, local appetite for wine has picked up sharply, with domestic sales rising 7.1% to A $ 4.9 billion for the year to August, according to market researcher IRI.

Colin Peterson, director of Petersons Wines, said cellar door sales and Chinese exports both declined during the early 2020 close, but now customers are “fed up with lockdowns so our sales are picking up”.

“I don’t think it will replace what we lost in that 12 week period, but we are definitely on our way back to where we were,” he said.

Savannah Peterson, a winemaker at the Savannah Estate Wines, said its cellar doors have seen a 200% jump in sales since the lockdown in the region waned in mid-2020.

“It’s great to be able to support in our own backyard and provide as much support as possible to all of these producers,” said local tourist Ben Sweeten during a visit to the Savannah Estate Wines.

($ 1 = 1.4057 Australian dollars)

Reporting by Stefica Nicol Bikes and Byron Kaye; Edited by Ana Nicolaci da Costa


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