Wine tariffs continue to pose challenge

Coonawarra vignerons are still feeling the effects of significant challenges to the Australian wine industry, with many changes and uncertainty due to COVID-19 and China introducing sky-high tariffs on Australian wine. Zema Estate’s Nick Zema, who is a partner in the family business, said he was uncertain what effect the tariffs would have.

“There is just so much happening over in China in regards to COVID and the economy in general, it’s hard to tell what’s really happening with sales,” he said. Mr Zema said his business had been exporting between 500 to 1000 cases of wine to China each year.

Zema Estate has maintained a strong relationship with its distributors in China over the past five years and Mr Zema said a great deal of the relationships with both distributors and customers were built by travelling to China. “Obviously COVID-19 has put a major halt to that,” he said. “I’m not sure when we’re going to be allowed to go over there and start marketing our products again.”

Mr Zema believed there would still be a market with China and there would be some market share, however there may not be any growth for some time. “It’s frustrating at times not being able to see what the future holds, so it’s really hard to forward plan especially in the way of expansion and building on any growth,” he said.

Mr Zema said Zema Estate had strong relationships and customer support bases which he believed would hold the business in good stead with exporting some products to China, but was unsure how much people would be willing to pay once the tariffs kick in.

“The last shipment we sent over was in October,” he said. “But we’ll know a bit more in the next few months.” Mr Zema said despite concerns, vignerons were resilient and endeavouring to find new markets, but would take time to build relationships.

Zema Estate found other promising markets for its wine and Mr Zema said the business looked forward to seeing what they bring. “We have been lucky that we have just started with two new distributors, one in Singapore and one in Taiwan,” he said.

Mr Zema said although it was hard to put facts and figures together over the past 12 months due to so many changes, an increase in consumer sales balanced everything out a bit. “We had a really strong on-premise market and with all the restaurants, bars and bistros being closed it’s had a huge impact on our domestic sales,” he said.

“But then the flip of the coin is direct to consumer sales have gone up which is really pleasing. Mr Zema said Coonawarra had an influx of visitors in recent months, which made for a successful Christmas period and direct to consumer sales and cellar door sales had also been strong.

“I really do think there has been a push to support local,” he said. “And we’re trying to do the same as well.”

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