Yellow Tail to be produced in Chile for Chinese market, to dodge import tariffs

Australia’s most widely exported wine brand Yellow Tail has unveiled a range specifically for the Chinese market but made in Chile to avoid China’s draconian tariffs on Australian wines.  

The wine, owned by Casella Family Brands  is being sourced from one of Chile’s biggest producers, Santa Carolina, and the range is to be named Yellow Tail World Series.   This follows in the footsteps of fellow Australian wine giant Treasury Wine Estates which similarly sidestepped Chinese import tariffs by producing its Rawson’s Retreat brand in South Africa for the Chinese market. Meanwhile, its flagship brand Penfolds which is heavily reliant on exports to China is soon to launch its Chinese Penfolds. This range will include four varietals – Cabernet Sauvignon, Shiraz, Merlot and Chardonnay, and will be available in mainland China from this month.  

“China is an emerging fine winemaking region and we’re confident we can produce a premium Chinese Penfolds that maintains the distinctive Penfolds house style and uncompromising quality,” commented Chief Executive Officer Tim Ford.

Meanwhile, Libby Nutt, Casella's general manager of marketing and export sales told Vino Joy News: “We are excited to launch World Series se we can continue to offer consumers everything they have come to expect from the brand – great wines full of flavour, from a brand with a fun and vibrant personality."

Tony Battaglene, Chief Executive of Australian Grape and Wine, said the was not surprised by these moves by Australian wine companies, as a way of keeping the country present in the Chinese market. 

"Most of our companies are going through a really difficult time because of the closure of the Chinese market so everyone is trying to diversify their supply chains,” he told Australian radio station ABC Radio Adelaide.

Before China imposed the hefty anti-dumping tariffs on Australian wine, the country  was one of Yellow Tail’s top five export markets. But Yellow Tail has never been quite as reliant on China as Penfolds, with China accounting for only 3% of Casella’s annual turnover compared to 25% of Penfolds sales.  

Today the US is Yellow Tail’s biggest market, accounting for over half of its global sales, with the brand ranked the number one imported wine brand in the country.