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China tariffs breakthrough

By Sunday 22 October 2023October 23rd, 2023No Comments

China has agreed to review its tariffs on Australian wine which have created turmoil in the industry.

The Australian originally reported that the tariffs had been dropped, but later changed its story to the tariffs are being reviewed.

It’s almost certain now that Australian winemakers will be exporting to China in the not too distant future.

The ABC says, “China has now agreed to lift the tariffs subject to a five-month review.”

The tariffs were introduced in 2020 and have cost Australian winemakers about $1.2 billion in exports, contributing to an oversupply of red wine and hardship in the industry.

Prime Minister Anthony Albanese announced the news ahead of a visit to Beijing in two weeks to meet with President Xi Jinping – the first visit by an Australian PM since 2016.

China’s review is expected to take five months and comes after the Australian Government agreed to suspend its separate World Trade Organisation review.

If the duties are not removed at the end of the review, Australia will resume the WTO dispute.

“I welcome the progress we have made to return Australian products, including Australian wine, to the Chinese market,” Mr Albanese says.

“Strong trade benefits both countries.”

Treasury Wine Estates has welcomed the breakthrough.

“It’s great news to see an agreement for a path forward to allow our Australian brands and wine to be sold in the Chinese market,” CEO Tim Ford says.

“There are only positives to come out of a favourable tariff review for the Chinese consumer, customers and wine category, for the Australian wine industry and for TWE.

“Both governments have worked constructively to achieve this outcome and we now look forward to a new era of positive engagement that will ultimately build a strong and growing China wine category should the review see the removal of these tariffs.”

Mark Bourne, president of the NSW Wine Industry Association said, “It is currently a very difficult time for the wine industry.

“Following several seasons of challenging weather events and the Covid pandemic, we are now facing worldwide falling consumer demand and an oversupply of wine.

“The announcement of a potential pathway to resolve the multi-year trade dispute, and the reopening of the Chinese market, is positive news for many grape growers and winemakers across NSW.”

Australian wine exports reached a record $3.1 billion in the 12 months to October 2020 – with China contributing about $1.2 billion of that.

Our exports now stand at $1.87 billion with New Zealand now having taken over us.

The China ban has hurt those regions most exposed to China including the Riverland, Barossa, Langhorne Creek and McLaren Vale.

China was Australia’s first $1 billion market. It is now worth about $10 million a year.

Caught out by our reliance on China, Australian winemakers have been scrambling to find new markets, with mixed success.

Our efforts were hampered during Covid when overseas travel was not possible.

Latest Australian wine exports update.

China: We live in hope.

China shuts Australia out for five years.

‘Cataclysmic change’ to sweep through wine industry.

The ‘miracle nation of the 21st Century’.

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