“It came at a very important time for the industry”—and behind that restrained phrase lie four years in which an entire industry learned to live again.
In the 2019–2020 financial year, Australia shipped $1.1 billion worth of wine to China. That figure was not just a line in a report—it was the anchor around which winemakers built their strategies, expanded plantings, hired people. China’s middle class had fallen for Australian red: dense, powerful, with the chocolate notes of Barossa Valley shiraz. A bottle of Penfolds on the table had become, in Shanghai and Guangzhou, something like a status gesture—like a Swiss watch on the wrist. By then, Treasury Wine Estates, owner of the Penfolds brand, was getting 30% of the group’s total operating profit from China, and the share was even higher for Penfolds’ premium ranges—39%. When nearly four out of every ten dollars from your best product come from one country, you inevitably begin to think in its language.
Then the door slammed shut. In 2020–2021, Beijing imposed anti-dumping duties on bottled Australian wine—from 116% to 218.4%, depending on the producer (countervailing duties were ultimately not applied, to avoid double taxation). A bottle that had notionally cost 20 dollars in China now cost the importer 40, or even 60. Exports did not “decline” or “adjust”—they collapsed. Roughly speaking, a billion-dollar stream became a thin trickle, then nearly ran dry. Warehouses in Adelaide and Melbourne filled with wine that had suddenly lost its destination.
Formally, the duties were anti-dumping measures: Beijing said Australian winemakers were selling their products below cost, undermining Chinese producers. But the context was far broader than the neck of a bottle. By 2020, relations between Canberra and Beijing were cracking along countless seams. Australia called for an independent investigation into the origins of COVID-19, blocked Huawei’s participation in building the 5G network, and passed laws aimed at countering foreign interference. China, Australia’s largest trading partner, responded with a series of blows to the most sensitive export arteries—barley, coal, lobsters, timber, and, of course, wine.
Wine was the perfect target: the industry was large enough for the blow to hurt, but not so strategic as to trigger an immediate systemic crisis. Its symbolic weight was enormous, too—Penfolds, Henschke, Wynns Coonawarra are recognised around the world, and a strike against them rang loudly. What still gets me is this cold arithmetic: choose a product that will inflict the maximum reputational pain while causing minimal damage to your own economy. China, naturally, could replace Australian wine with Chilean, French, Argentine wine—and it did.
Australia filed a complaint with the WTO, launching formal proceedings. But the mechanisms of the World Trade Organization are a marathon, not a sprint: decisions take years, and grapes on the vine do not wait for arbitration panels.
When your main buyer hangs a “closed” sign on the door, you have two options: sit in the warehouse or repack your bags. Australian winemakers chose the latter, though “chose” is too gentle a word for what was really a forced turn on the run. Treasury Wine Estates began aggressively expanding its presence in Southeast Asia, South Korea, and Japan. Penfolds launched collections aimed specifically at the American and European markets—a brand that had spent decades building its Asian identity suddenly began speaking to sommeliers in New York and London in a different marketing language.
Small and mid-sized producers were in a far more vulnerable position. Many estates in South Australia, Victoria, and Western Australia had been geared specifically to Chinese tastes—full-bodied, intense reds with high alcohol content. Redirecting those volumes to markets where people drink very differently was like taking in a coat by two sizes. Part of the harvest went into bulk wine—unbranded wine sold by volume for pennies compared with bottled wine. Some vineyards were simply torn out: according to industry groups, Australia’s vineyard area began shrinking for the first time in many years.
At the same time, a curious side effect emerged: Australian wine became cheaper on the domestic market. Bottles intended for Shanghai ended up on supermarket shelves in Sydney—at prices that pleased consumers and dismayed winery accountants.
The government of Anthony Albanese, which came to power in May 2022, set a course for a cautious warming of relations with Beijing. Trade Minister Don Farrell became one of the key architects of the process—a series of negotiations, visits, carefully calibrated gestures. Diplomacy here resembled tuning an old radio: millimetre turns of the dial, crackling interference, and then—suddenly—a signal.
At the same time, the WTO case continued, and the very fact of the proceedings, many observers believed, gave Canberra leverage in the negotiations. When the sides finally reached an agreement, Australia ended the case—trading, in a sense, a legal process for a practical result. On 29 March 2024, China officially removed anti-dumping and countervailing duties on Australian bottled wine. “We welcome this outcome. It comes at a very important time for the Australian wine industry,” said a joint statement by Farrell and the prime minister, and in those words you could hear the relief of someone who had carried a heavy tray for a long time and had finally set it down on the table.
But an “important moment” is not yet a “good year.” And certainly not a return to 2019.
This is what makes the story truly bitter—and I do not mean the tannins in the glass. The duties have been lifted; formally, the path is clear. But the China winemakers want to return to is already a different country when it comes to alcohol consumption. China’s domestic wine market in 2024 is estimated at roughly one-third of its 2012 level. One-third. Young Chinese consumers drink less wine than their parents’ generation did. Competition from hard liquor—baijiu—has not gone anywhere. The trend toward healthy living, the economic slowdown, changing consumer habits after the pandemic—all of it has compressed the market to a size that would have been impossible to predict in the well-fed years of the wine boom.
Experts agree that a swift return of exports to the peak levels of the 2010s should not be expected. While Australian winemakers spent four years searching for new buyers, their former niche in China partly disappeared and was partly taken over—by Chilean, French, and Spanish producers, who quietly filled the shelves while the Australians were gone. Returning to a market and winning back a market are two entirely different things, and the latter costs considerably more than the former.
For Treasury Wine Estates and Penfolds, however, the situation is not hopeless: the brand has retained its recognition, collectible wines like Grange never entirely vanished from the view of Chinese enthusiasts, and the premium segment is less sensitive to the overall decline in consumption than the mass market.
Four years of trade war left marks on Australian winemaking that no diplomatic thaw will wash away. The industry has become more diversified—by force, painfully, but it has. Dependence on a single market, which seemed like a convenient strategy in 2018–2019, is now seen as a lesson learned at a high price. Vineyards ripped out during the crisis will not be restored in a season—it takes a vine three or four years before it begins yielding quality fruit.
One detail stays with me: the official statements on the occasion contain neither a “great” nor a “historic” day—only the dry “we welcome this outcome” and a cautious caveat about an important moment for the industry. Perhaps because the minister understood: the open door leads into a room that has become considerably smaller over four years. Australian winemakers have got their key to the Chinese market back. The question is what they will find behind the door—and whether what remains will be enough to justify the years of waiting. The first shipments of wine after the duties were lifted had already left for Chinese ports in the spring of 2024, but the financial results of that return will not be visible until the end of 2025.