The craft brewing industry is raising a toast to the resurgence of Australian barley imports, heralding a potential cost-saving boon amidst recent economic challenges.
Over the past three years, the burgeoning craft beer sector in China faced multiple setbacks, including the pandemic’s impact on bar attendance and heavy anti-dumping tariffs imposed by the Chinese government in 2020 on Australian barley and wine.
The removal of the barley tariffs in the previous month, following an easing of trade tensions, is expected to lower production costs for brewers across China. This development is particularly welcomed by craft beer brewers who rely on pure malt without additives like broken rice or starch, which had made their products more expensive.
Prior to the tariffs, Australian government data indicates that China consistently purchased between 86% and 91% of Australia’s malting barley exports, occasionally accounting for over half of Chinese malting barley demand.
Miller Meng, brewmaster at Shanghai’s The Brew, expressed optimism about the return of Australian barley, stating, “Australian malt’s return to the market will restore prices to a more reasonable level.” He highlighted the surging prices of alternative malts in the absence of Australian supplies.
With over 13,000 craft beer-related businesses in China, the craft beer industry had been a thriving segment in the world’s largest beer market, worth an estimated $125 billion this year. However, the absence of Australian malting barley forced many Chinese craft brewers to explore alternatives, often at a higher cost due to global supply chain disruptions.
The hope now is that the reintroduction of Australian imports will help stabilize profit margins for craft brewers. Australian malting barley is currently offered at a competitive $350 per metric ton compared to $390 for French barley, with more favorable freight costs from Australia to China. Approximately 300,000 tons of Australian malting barley have already been contracted for sale to China since the tariff removal.
For Australian barley farmers, this revival of the Chinese market is a welcome development, as it restores an essential export channel. The barley that had previously been destined for Chinese beer production had been diverted to other markets at lower prices in recent years. Brewers in China anticipate a resurgence in demand for Australian malting barley over the next two years, signaling a brighter future for the craft beer industry in the country.
