Aussie wine exports shrank as drinkers sober up; French cognac producers to pay to rip out vines as demand sinks
CANBERRA/PARIS — The value of Australia’s wine exports fell by 8% to A$2.34 billion ($1.6 billion) in 2025 as a global decline in drinking led to lower shipments to key markets including China and Britain, an industry body said on Wednesday.
This as tariffs hit French cognac producers who now plan to pay to tear their vines out to cut output.
Australia is the world’s fifth-largest wine exporter. Like other wine producing regions, it is dealing with oversupply and declining sales.
“Consumers are reducing overall alcohol consumption in line with wellness trends and in order to save money as the cost-of-living increases,” said Peter Bailey, head of market insights at Wine Australia.
“For wine exporters around the world, trade barriers and regional conflicts are also making it more difficult and costly to get product into markets,” he said.
The value of Australian exports to China, its most lucrative market, fell the most sharply, dropping 17% last year to A$755 million ($530 million).
Australian winemakers logged strong sales to China in 2024 when Beijing removed tariffs that had blocked trade, but a rapid shrinking of Chinese wine demand is now taking its toll.
“The Chinese wine market is one-third of the size it was five years ago,” Mr. Bailey said.
FRENCH COGNAC PRODUCERS
Meanwhile, French cognac producers plan to pay to tear their vines out by the roots to cut output in order to address a drop in demand for the high-end liquor due to tariffs.
Cognac was one of the main casualties of the recent trade tensions between the European Union (EU), the United States, and China, which have threatened to jack up tariffs on it.
An anti-dumping probe has also hit brandy sales in China.
France’s main association of cognac wine growers will pay its members €6,000 ($7,145) per hectare of vineyard destroyed, on top of €4,000 already offered by the French agriculture ministry, the UGVC’s head said on Tuesday.
“We need to re-align the volume of production with demand,” UGVC head Anthony Brun told Reuters.
The UGVC estimates the total volume of cognac sold has fallen by more than a third in the past three years, to about 140 million bottles in 2025.
Mr. Brun said it will borrow money over a 10-year period to finance the handouts. He declined to estimate how many hectares will be destroyed.
Recent trade deals between the EU and Mercosur, as well as the EU and India, may open new markets for cognac, but it will take years to build lasting demand, Mr. Brun said, adding India seems to offer significant potential for the industry. — Reuters
