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China: We Live In Hope

By Saturday 25 June 2022June 27th, 2022No Comments

The Australian wine industry remains hopeful that the crippling Chinese tariffs on Australian wine will be lifted in the not too distant future.

However, Tony Battaglene, CEO of Australian Grape & Wine, told the Technical Conference on Monday that “China will not be back in the near future”.

Australia’s relationship with China has improved with the recent election of the Albanese Government and the two countries are at least back talking again.

As reported by The Australian, China’s ambassador to Australia, Xiao Quan, says Beijing “wants to restart the relationship” with Australia by the 50th anniversary of diplomatic ties between the two nations in December.

He says the 14 grievances China has listed were not demands that needed to be met before the relationship could be repaired.

“I’m not going to characterise it as a precondition,” Mr Xiao said at the University of Technology Sydney on Friday.

“It’s just that they’re concerns and we’re going to talk about this.

“Looking into the future, China-Australia relations enjoy greater potential for cooperation and bright prospects.

“That is the message that I brought with me from China.”

Australia has lost $1 billion in wine exports to China since tariffs of up to 218 pecent on Australian wine were announced 18 months ago.

Wine exports from Australia reached a record $3.1 billion in the 12 months to 31 October 2020.

They have since crashed to $2.05 billion, creating an oversupply in many regions as Australia makes slow progress in finding new markets.

Prime Minister Anthony Albanese has said that for the relationship with China to mend, they needed to remove sanctions on Australian products including wine and barley.

Greg Sheridan, columnist for The Australian, says Beijing will never admit a mistake, “or even that it has changed its mind”.

“Therefore, just as there was no announcement when the trade boycotts were implemented, so there will be no announcement when they are lifted,” he writes.

Adelaide businessman Francis Wong told WBM 12 months ago that the impending 50th anniversary of diplomatic ties between the two nations would provide an opportunity for a reset.

Lifting the tariffs would be a good day for Australian wine – in particular the inland regions exposed to China which are facing downward pressure on prices.

Long term, it remains to be seen whether Australia can take a stand on China affairs – including Taiwan – without fear of being penalised on the trade front.

We live in hope.

Meanwhile Australian winemakers are back travelling again in numbers and the search continues for new markets.

China or no China, after being caught out relying too heavily on one market, that search will go on forever.

If the tariffs are lifted, will Australian winemakers return to China after what’s happened?

Of course they will, the margins are too good and a powerful country of 1.4 billion people is too important to ignore.

And don’t forget, they love Australian wine.

Photo: Hyunwon Jang.

Aussie Wine Exports: The Pain Continues

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