Australia-China trade relations have continued to improve in the last quarter. China has now removed the majority of trade restrictions affecting Victorian exporters, notably removing tariffs on Australian wine on 29 March 2024.

The developments have been welcomed by Victorian food and beverage exporters, with China being the sector’s largest export market worth $4.7 billion in 2022-23 (the next largest market is Japan at $1.7 billion).

The increasing popularity of spirits 

Within the food and beverage sector, an area of growing interest is spirits in China, which is the largest spirits market globally. Although China has a thriving domestic market, imported spirits have gained increasing popularity. Chinese customs data showed that the value of imported spirits rose by 30.5 per cent in 2023 compared to 2022.

The types of beverages being imported by China reflect a shift in recent years, particularly with the rise of Generation Z as consumers of alcohol. While baijiu still dominates China’s alcohol market, younger Chinese consumers are driving interest in a wider variety of spirits. Similar to other global markets including Australia, younger consumers are interested in exploring diverse and creative flavour profiles such as cocktails, ready-to-drink (RTD) and low-alcohol beverages.

This is reflected in a recent survey by the China Liquor Industry Association, which revealed that nearly 70% of consumers are willing to explore new flavours and brands.

The opportunity for Victoria

These trends highlight a growing opportunity for Victoria, which is home to 188 distilleries producing award-winning spirits.

Victorian spirits boast exceptional quality and flavour profiles that cater to the tastes of Chinese spirits connoisseurs. With increased market awareness of our outstanding products, Victorian spirits are well-placed to enter the expanding range of top-tier establishments.

Support for Victorian businesses

The Victorian Government’s Distillery Door Program seeks to support and enhance the State’s distillery industry. Global Victoria manages the export stream of the Program, which includes a range of trade facilitation and promotional activities in priority export markets, including China.

For those considering entering the China market, we have an established network of five Victorian Government Trade and Investment (VGTI) offices in Shanghai, Beijing, Chengdu, Nanjing and Hong Kong. Our VGTIs can assist in connecting your business to distributors and other partners.

Two events have been held in the last two months with almost 40 guests from the spirits industry in China attending across both events. Master mixologist Shane Xie provided a guided tasting, while Chris Xi, a reputable mixologist in China, designed four creative cocktails to showcase the diversity of the products

Other activities

Global Victoria has also supported distilleries in other trade promotion activities, including outbound trade missions, such as China International Import Expo (CIIE, November 2023), and is in the planning stages for activities in the next financial year.

Looking ahead