recent punitive tariff hikes from China have all but closed the doors for the next five years, although Australian wine will probably trickle in through the borders through imaginative and sometimes dangerous means. This hiatus will see a strengthening of a domestic Chinese wine industry and opportunities for our competitors to fill the considerable gap.
For instance, Concha Y Toro of Chile has announced the opening of a regional office and the start of its own distribution in China. California’s Gallo has also filled the void at Summergate with the aim of building more presence in that market.
For Australian wine producers, it must feel quite shocking to lose a market overnight. Some observers are blaming the Australia Government for being cavalier and irresponsible. The old chestnut of national security versus economic health is being thrashed out by the media with the predictable outcome of a stalemate. Our A$1.13 billion wine trade with China is a pawn on the chess board, especially compared with iron ore receipts (A$85 billion). Nonetheless we will have to recalibrate and carry on. Australian wine has always been vulnerable to geopolitics and grand meddling.
During the economic depression of the 1890s, Australian wine prospered with a surging export market for rich, flavourful, softly textured ferruginous ‘Burgundy’. The trade in bulk red wine, based primarily on shiraz, mataro, grenache and cabernet sauvignon, began to explode from the 1870s. It is no coincidence that most of South Australia’s oldest surviving vineyards date back to this period of intense activity. Major wine producers of the time supplied wine to PB Burgoyne and Co and the Emu Wine Company, including Chateau Tanunda, Hardy’s, Penfolds, Reynella, Wirra Wirra, Seppelt and Spring Vale. Between 1880 and 1900, imports of Australian colonial wine into the United Kingdom grew from 155,000 to 3.8 million litres. Emu Burgundy, Keystone Burgundy and Tintara Burgundy became household names in England. The Rutherglen district was also favoured and new ventures were established to feed this booming market, even with the threat of phylloxera at its doorstep. Murray Valley Vineyards, Mount Ophir, All Saints, Netherby and others filled the pipeline with the belief that this ballooning trade would not stop.
But political tensions also emerged during the 1880s, with fears of a Russian invasion. The rise of China and Japan also increased anxiety, leading to policies to deter Asian migration. The White Australia policy of 1901 was one of the unifying political issues that led to federation. Nonethless, exports of Australian ‘Burgundy’ continued throughout the early 1900s, but the outbreak of war and the threat to shipping saw a rapid decline in fortunes.
The end of World War I slowly saw export markets return, but it was intermittent. In 1919, from New South Wales, Penfolds consigned 106 cases of wine to Madras, India, six cases to Borneo and Lindeman’s sent 150 cases of wine to Calcutta. By 1920, Lindeman’s was shipping 50 hogsheads to London and Penfolds 40 cases of wine to Shanghai. Penfolds Minchinbury wines were exported to India, Japan, Manila, Noumea, “the East Generally”, Great Britain, Norway, Sweden and the US.
All of these shipments were signs of life and hope for renewed prosperity, but it would take some political manoeuvring to truly get the wine business on track. The Export Bounty Act of 1923 opened the doors once again to the UK market, but it also favoured importing fortified wines, a substitute for cheap Port and Sherries from the Iberian Peninsula. Although Australian ‘Burgundy’ brands prevailed during the inter-war years, more turbulence threatened trade.
Japanese expansionism in the early 1930s created anxiety within the Federal Government, although the average Australian had little knowledge of the country's intentions. Japanese wool buyers visited the colonies quite regularly and Australian trade commissioners to Japan, China and the Netherlands (which controlled Indonesia) had great hopes for an extension of the wine and brandy market in the east.
By the time Japan invaded China in 1936, there was heightened concern for the political future of the region. The country’s militarisation and race to catch up with industrialised nations resulted in unease across Australia. This tense backdrop of trade opportunity, yet vulnerability to attack, gathered like a coming storm.
Some 85 years later, history repeats and a new anxiety is rising.