continued - Grape and Wine Research and Development Corporation

Australian wine export strategy – perspectives for the future
Leveraging on current premium position rather than chasing the volume-business of entry priced wines
� Australian wine has gained momentum at the “high-end” and
“premium” segments in China with FOB export prices of AUD 2.50-
4.99 and AUD 5.00-7.50, equivalent to RMB 200-350 and RMB 350-
500 at on-trade prices
� Compared to French wines, Australian wines in China are largely
concentrated at the premium segment, which reinforces its
recognition as a wine supplier at China’s high-end pricing point
� Although cheaper entry-priced wine is foreseen to grow faster than
premium wine in volume terms over the coming years, short-term
strategies to shift to cheaper wines would not be the suggested
approach for the import of Australian wine to China as a whole
� Given the recent penetration of Australian wine in the high-end and
premium price points in China, developing a dual-pricing strategy at
the entry level may jeopardize this favorable positioning over time
� The perception of Australian wine by Chinese consumers is neutralto-positive
and still needs further confirmation as a “good-value-formoney”
premium wine
� A strategy of differentiating by “label” or “region” to enter both the
low-end and high-end market remains questionable given that wine
consumers in China will typically develop one prevailing image for
import origins and may consider different priced products from the
same country as low quality wines being dumped in China
� For example, although French Bordeaux is associated with premium
quality, the current bi-polar pricing approach is seen to erode
theprestige of French wine and confuse consumers
Australian wine export volumes to China (bottle only)
Source: AWBC, 2010 Unit: AUD/750 mL Bottle
000’ 9L cases
FOB price point
92