Welcome back to Quest means business Australian wine makers can say cheers to getting back to business as usual in China Beijing lifted crippling tariffs on Aussie wine last week the duties went as high as 218% they were enacted more than three and a half years ago during a tense period between the two Nations.
Australian officials welcomed the news and for good reason too the Chinese market for Australian wine was once worth more than $653 million Nikki Palin is an Australian y maker and she joins us now from Melbourne Nikki fantastic to have you on the show you've had a fascinating and challenging time.
Over the last three and a half years your fluent Mandarin I believe your business before this all happened was 95% exports to China and then the tffs hit it was during the pandemic and you totally had to transition how tough was that well I have to say it was incredibly tough um I actually in my life I never imagined that it would be.
Like a perfect storm of having these two things happen at the same time so it was there was a a lot of very difficult moments in the last three and a half years that's for sure but two things you learned I think was um the ability to change at speed but also the importance of diversification where are you today and what do you.
Produce well I'm still obviously in the wine business I'm a wine maker so I I love wine and something I'm so incredibly passionate about out but what I did during the last 3 and a half years was diversify into not just um other export markets so I now export to Korea to Taiwan to Japan um but also really um building a strong foothold into the.
Domestic Australian market and so I've also there's so many different channels there so I've opened up a cell door I've got a little Urban Winery going now I do lots of events I sell into restaurants and bars so what this has actually done for me is to build a very strong foundation so now that China open again I'm able to have this very strong base.
As well as export to China and that's the biggest thing that I've really learned is that as you said before to diversify yeah a stronger a more Diversified business okay so what was your reaction when you heard that the tariffs were going to lift oh I was absolutely elated I can't tell you how happy I was it was just like a you know.
Better than winning any prize in the world it was just incredible okay so talk to me about how quickly you think you can perhaps and I'm sure you've already been talking to your contacts there about shipping to China because obviously the market there is evolved we've also got a global over capacity problem China's facing it too the.
Economic environment has changed um how are you going to approach it and what are you expecting in terms of demand well it's very interesting initially I was thinking that perhaps it would be a little bit less and there be bit um I guess a little bit more cautiousness but what I'm finding so far is that a lot of my Chinese customers.
From the past um have come back and some of them came back within minutes after the announcement so and so I'm finding that there's I feel personally there'll probably be a little of a pipe fill happen so initially I'll be able to get back into the market I'm hopefully within the next four five weeks you know start shipping containers over there um.
And then after that I think we'll see it might settle down a little bit as you know people start to find their feet in the new dynamics of the market you know as you said uh there's a you know there there's an economic um slowdown in China at the moment so we'll see however that said I really feel that I'm going to approach the market differently this.
Time you know this is what's given me an opportunity of not being there for three and a half years you sort of think well how could I do it better and what would I want to change from last time so I'm pretty ready to pack my bags and get on a plane and go to China and just find some new opportunities as well how is your business there going to evolve.
Because that comment's really interesting how is the approach going to differ this time around because I read that you were selling around 200,000 cases in China how much of that do you think you can capture but to your point and I'll ask it again how are you going to do this differently this.
Time well I because I speak fluent Mandarin it actually gives me an incredible advantage in the market and I've also been engaged in China for actually nearly 30 years now so I'm quite um very you know comfortable with the culture and and um the way China works so I plan to go to China and really look for partners that I think.
Want to work slowly and in a very long-term sense in the market because I think that's what's really important is to slowly build up the brand build up the customer base and just build a very nice Foundation but the other thing is really looking at two-way trade because I think that one of the things in the past that Australia did we exported a.
Lot of our wines to China um but I just want to start exploring well what how can we work more closely together in a two-way trade perspective you know maybe we should be seeing more Chinese wine on our shelves here in Australia that's interesting and that builds resilience for the business as well because they then have something that hurts them if.
Those barriers start to rise again which I think is um a really important point I mean what we learned through that period was a false word a false phrase you say the wrong thing you accuse someone of doing something where covid-19 is concerned and that can create real geopolitical tensions and sort of overnight tarff can go from very low to.
Being punitively high are you concerned Nikki that something like that could happen again it's not really something that you can prepare for you just have to be aware of it are you worried about that I I don't think I'm at particularly worried I mean um our current Australian government they have very skilled diplomacy and I believe that their.
Approach now um hopefully shouldn't create any more tensions in the future but that that's to say you can't really count um you can't discount that could happen again in the future so it's certainly something I've very much learned is that as I said don't put all the eggs in one basket you know really just try and make sure that you have.
That very Diversified portfolio of different channels different markets different countries because it could happen again and that's something that I think every wine maker in Australia is aware of but that said you know I I hope it doesn't happen again I feel I'm hoping that that was just one moment in time and that future governments can.
Learn from you know the mistakes of the past and that we can just continue on with a very you know mutually beneficial two-way trade okay I want to get your wine wisdom now what what was the average price of the bottle that you were selling to the Chinese market and how do tastes in the Chinese market perhaps differ to what you've now built.
In the domestic market for example or those that are drinking from Korea Taiwan and Japan can you can you give us a flavor of how tastes are different in the different um countries and regions yeah sure so um well actually it's an interesting point so China in the past because I think China's evolved as well over the last three and a half.
Years so China in the past was predominantly I guess that more um premium entry level wine you know wines that were they're soft they're red they're you know they're quite approachable like lower acidity very quite FR forward and I think that's something that Australia has always done incredibly well especially if you.
Compare it to certain parts of you know the old world WIS as well so that's what in the past um and then if you but I think now China's actually has evolved they've had three and a half years to explore all the other different um varials and all the different um regions in the world and what I'm really seeing now is that um I'm hoping and I'm seeing.
That there's an interest in the more affordable entry level but also into mid and also premium wies as well well and not that there wasn't a premium Wines in Australia before but I'm seeing that for example I make a nebiolo and nebbiolo is something that it's light in color it's got really interesting Tannon structure but the Chinese have actually taken.
Incredible interest for it something I was not expecting um so and then back to other part of the question which is about different markets so um Japan they have they love pinoir they love chardonay um and they also love Australian Shas so and they take the wines at many different price points Japan's quite a mature Market in South.
Korea for example I'm selling a lot of my other Italian Bridal so things like monano things like freano things like nebiolo again so that's absolutely fascinating so I think with not just in an Asian sense but I think um globally I think the youth and the younger people they have a a a more exploratory like they're more in curious about different.
Styles so I'm really hoping that the pette will broaden and then in the future we can really just send all these different interesting Styles and price points to e at all the markets around the world Nikki I love your enthusiasm I'm so glad you stayed in the wine industry cuz clearly you're a you're a perfect fit it's wine o clock somewhere.
In the world and know I have a real taste um yeah I can't drink and drive on TV Nikki great to chat to you good luck with rebuilding the China business Nikki P there thank you
Put it on the market to JaKoTa countries 😊