South African winemakers toast China demand boom

Lockdown restrictions could have been a disaster for South African wine estate Vergenoegd Low.

Measures such as a ban on alcohol sales destroyed its domestic market.

But the 325-year-old estate was thrown a lifeline by an increasingly bitter row between two countries thousands of miles away.

Long-simmering tensions between Australia and China boiled over after Canberra led international calls for an inquiry into the origins of the global health crisis in Wuhan.

Beijing retaliated in November - slapping a 212% tariff on Australian wines.

Before then Chinese drinkers bought nearly 40% of Australia's exported wine

But with trade brought to an abrupt halt, companies like Vergenoegd Low were given an opportunity.

"We wouldn't be where we are today without this China deal."

Shaun McVey is marketing manager at the estate, which has recently won a new Chinese contract.

"... just being able to get rid of the stock that we currently sit with in our cellar but with the agreement in place, that the volume increases every year. It's just given us that financial surety for the next five to seven years, we should be in a good space."

Exports of South African wine to China have jumped 50% over the past three months, according to the trade body Wines of South Africa.

At the "Cheers" wine shop in Beijing, owner Lin Lulu welcomes the change.

"Now the South African wine has great advantages to the Australian wine because of the new tariff situation. I think the South African wine has great potential to surpass the Australian ones."

And it's not just booze. And not just South Africa.

The trade dispute also gives opportunities to countries across the continent to boost exports of everything from bauxite to beef.

Analysts do warn, however, that the Chinese market presents a range of obstacles including language barriers and opaque bureaucracy.

But for now at least, Australia's loss is a reason for South Africa's vintners to raise a glass.