SYDNEY—Three years ago, the Kilikanoon winery in Australia’s picturesque Clare Valley appeared to gain an export advantage when it was bought by
Yantai Changyu Pioneer Wine Co.,
China’s largest wine producer.
This year, it hasn’t sold a single bottle to China.
A worsening diplomatic and trade dispute has choked off exports of Australian wine to China, including the 350,000 liters of premium Shiraz and other varietals that Kilikanoon Wines Pty. Ltd. had been shipping to the country each year. China, angered by Australia’s call last year for an international investigation into the origins of the pandemic, has imposed tariffs and restrictions on wine and other commodities such as barley, coal and even lobster.
The trade tensions have accelerated a decline in Chinese investment into Australia and squeezed China-owned businesses in the country from both sides, as they grapple with the loss of one of their most profitable markets on…