Chinese appetite boosts wine sales

DESPITE the frustration of humid and boggy harvest conditions in NSW vineyards, the Australian wine industry is on track for one of its better quality vintages of recent years - and better prospects in the price-squeezed wine marketplace.

Although global financial insecurity and an uncompetitively high dollar are undermining Australian export returns from key volume markets like America and Britain, Chinese wine drinkers are suddenly the toast of the local industry.

In the past 18 months China switched from being a buyer largely focused on bulk wine to paying good money for quality Australian bottled brands.

Chinese demand helped drive a 5 per cent rise in the average price of Australian bottled exports to $4.31 a litre in 2011 - the best price in more than two years.

A whopping 23pc lift in the value of Australian wine sales to China last year also propelled the Asian giant to become our third most lucrative destination for overseas sales (worth about $201 million), ahead of Canada and New Zealand.

With China's taste for wine flourishing - and its own vineyard expansions in overdrive - Chinese wineries are now lining up to learn more about making good wine from Australian experts.

Other thirsty Asian markets - including Hong Kong, Singapore, Thailand and Malaysia - are also on the rise as promising export markets said Winemakers Federation of Australia chief executive Stephen Strachan, South Australia.

"The good news is that not only are Australian wine exports to Asia rising, these markets tend to pay above the average for our export sales - particularly China," he said.

"The UK and US are still much bigger and very important markets, but we've got a real challenge in trying to turn lift our low price point reputation in these markets.

"Australian brands are the wines most likely to be consistently on discount in British supermarkets, and unfortunately UK sales are shrinking across the board as consumers spend less."