Australia Has 859 Olympic Swimming Pools of Wine in Storage: Rabobank

That's more than 2 billion lieters of wine or more than 2.8 billion bottles.

Improving trade relations between the two countries and the recent removal of Chinese tariffs on Australian barley has led to optimism that five-year tariffs placed on Australian wine in March 2021 may be removed early.

However, the Rabobank report says that, even in a “best case scenario”, with tariffs removed this year and Chinese consumption of Australian wine recovering quickly, Australia’s wine industry still faces at least two years to work through its current wine surplus.

China’s red wine obsession was undoubtedly central to Australia’s wine industry success story in the late 2010s, report author, RaboResearch associate analyst Pia Piggott, says.  She notes that global wine imports to China grew at 18% compound annual growth rate (CAGR) in the decade up to 2017 – when they peaked at 750 million litres – elevating China to be a top five wine importing nation globally,” she says.

“In the four years following the China-Australia Free Trade Agreement in 2015, the tariff on Australian wine reduced from 14% to 0%, helping to double Australia’s market share in China from 12 percent to 24 percent.”

Ms Piggott says that over this time China became a strong value market for Australian red wine varietals – making up 18% of Australia’s export volume and 40%of export value at its peak.

When China imposed a number of tariffs and soft bans in 2020/2021, wine took the biggest hit, losing about one-third of export value from its 2019 peak.