Australian winemakers will be charging their glasses with something special tonight with the news that China is letting us back in after almost four years of crippling tariffs.
The Chinese Ministry of Commerce (MOFCOM) released an interim draft determination about two weeks ago outlining a proposed removal of the current tariffs on Australian wine imports into China.
Then the news late today that we were all waiting for – Beijing has dropped the tariffs.
MOFCOM announced, “It is no longer necessary to impose anti-dumping duties and countervailing duties on the imports of the relevant wines originating in Australia.”
The Australian government said in a statement that it had been notified that from Friday China would remove its duties on Australian bottled wine.
“We welcome this outcome, which comes at a critical time for the Australian wine industry,” the statement read.
“The re-entry of Australian bottled wine into the Chinese market will benefit both Australian producers and Chinese consumers.
“This outcome affirms the calm and consistent approach taken by the Albanese Labor Government and follows the success of the similar approach taken to remove duties on Australian barley.”
Treasury Wine Estates CEO Tim Ford said, “Today’s announcement is a significant positive not only for Treasury Wine Estates, but also for the Australian wine industry and wine consumers in China.
“Since the tariffs were introduced three and a half years ago, our commitment to China has been resolute, and we now look forward to partnering with our local customers to re-establish our Australian COO portfolio in the market while continuing to be a meaningful contributor to the development and growth of the Chinese wine industry.
“This is a medium-term growth opportunity that we will pursue in a deliberate and sustainable manner, focused on growing our portfolio in China while continuing the strong momentum that we have delivered in several global markets over recent years.”
Australian Grape & Wine chief executive Lee McLean said, “This is a very important decision for the Australian wine industry.
“It reflects the positive outcome of diplomatic efforts by the Albanese government to stabilise relations with China and underscores the importance of collaboration between government and industry.
“We acknowledge and thank Foreign Minister Penny Wong, Trade Minister Don Farrell and Agriculture Minister Murray Watt and their respective departments for their steadfast support of Australian grapegrowers and winemakers throughout the process.”
Mr McLean said the Australian wine sector has made a long-term commitment to building the market for Australian wine in China, with many wine companies having developed close relationships with importers, buyers and consumers of Australian wine over many years.
“We are working closely with the Australian Government and Wine Australia to ensure a coordinated approach is taken to re-entry and that the sector is well positioned to re-establish trade relationships,” he said.
“We look forward to seeing Australian wines back on Chinese dining tables and rejuvenating our relationship with customers and business partners in that market.
“We will also, however, be maintaining our focus on diversifying our export footprint and growing demand here in Australia as well.”
Accolade Wines boss Robert Foye told The Australian the news was positive for his business and for the whole Australian wine industry.
“While we do not anticipate a snapback to 2020 levels, we do see a sizeable opportunity for our business in China and we are excited about the long-term potential this market brings,” Mr Foye said.
Chinese consumers are not drinking wine like they used to, but a win is a win for an industry that has lost so much.
In October last year China agreed to review its five-year tariffs on Australian wine.
Industry analysts are advising potential exporters to China to exercise caution.
China was the Australian wine industry’s first billion-dollar market, reaching $1.2 billion in 2019.
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.
By the end of 2020 our exports had crashed to $2.89 billion – a loss of $210 million in two months.
Last year Australian wine exports stood at $1.9 billion.
Australian winemakers have been shipping wine to Hong Kong in anticipation of the China market reopening.
One winery in South Australia is rumoured to have an order for several million litres of red wine from one customer in China.
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Let’s hope that Scomo and his non-thinking retinue can keep their traps shut this time. We are a trading nation: it’s what we do best, and there are many Australians very good at this. Our standard of living in this fine nation depends on these people. Fireside dreams of being some sort of important middle power is massively unhelpful and unnecessarily damaging. The lesson is here to learn.