Wine Industry calls for a quick pivot as China export disappears
Ruth Ellis runs a winery in the Macedon Ranges in Victoria. She has been in the industry since she was a child.
So has her mother, Ann Ellis, who grew up on winery in the Hunter Valley and, in the 80s, built her own business, the one the family runs today.
As majority winemakers do, Ann Ellis began as a small producer but, over time, increased production. So much so, she began capitalising on the export market in China. Over the last 20 years, exports has accounted for 50 per cent of sales.
But now the Ellis’ are facing crippling import tariffs of up to 200 per cent from China, after they accused Australian producers of selling wine for below cost of production.
The Ellis’ and the wine industry at large are now looking for a quick pivot as the 1.2-billion-dollar-industry takes a massive blow.
I don’t blame the Ellis’ or other wine brands for capitalising on such a lucrative export market. But I don’t think you’re doing the future of your company any favours if 50 per cent of sales are dependent on exporting to China.
If the last 12 months have taught us anything, it’s that relying on intermediaries to bring large amount of stock to customers is damn risky, especially on a global level. If we do, we risk losing leverage.
On the other hand, if we build our core business around our true fans with which we’ve developed a direct relationship, we’re not as vulnerable to political decisions—or other—of which we have no control.
A lucrative handshake deal is tempting. But the people who stay small and nimble, who do the hard work and develop relationships with those they aim to serve will have greater chance of longevity.