Wine Quarterly Q4 2021: The Chinese Wine Market: Australia's Loss, Whose Gain?

The Chinese wine market is going through some important transitions. Weak consumption trends, exacerbated by the pandemic, raise questions about overall growth opportunities moving forward. In addition, the tariffs introduced on Australian wine imports have left a gap in the market, creating opportunities for others to fill. Some of the countries poised to gain share are fairly obvious, but others less so.

Report summary

As noted in our last report, M&A activity in the wine industry has skewed to larger deals this year, mainly in the US. The past six months has seen a continuation of this trend of large US deals, including the sale of Ste. Michelle, Delicato Family Wine’s acquisition of the Francis Ford Coppola Winery, and the sale of WX Brands. Looking forward, we expect the US to remain the focus of most M&A activity, given the ongoing trend towards premiumization, though we note that the recent changes in the Chinese market could also create some impetus for deals, as wineries look to adjust their position in that market.

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