Agriculture
13 April, 2024
Long road to wine trade recovery
By CHRIS EARL AUSTRALIAN wineries face a long road to recover ground in the lucrative Chinese market after the lifting of tariffs last week. China put heavy tariffs on imported Australian wine in 2020- that wiped out much of the $10 billion annual...
By CHRIS EARL
AUSTRALIAN wineries face a long road to recover ground in the lucrative Chinese market after the lifting of tariffs last week.
China put heavy tariffs on imported Australian wine in 2020- that wiped out much of the $10 billion annual trade.
“We’ll never recover back to what it was but the lifting of wine tariffs with our largest trading partner is a positive, something with a bright side” said Water Wheel’s Peter Cumming.
The veteran Bridgewater vigneron predicted the key to market recovery would be through the larger wineries.
“But to think we will get back to the trade value we had and within 10 years is fanciful. You can’t be dumped from the market and then just pick it up again,” he said. “The real bright side is that we are back on speaking terms ... the language has changed ... with our largest trading partner.”
Mr Cumming said a third of wine imported by China had come from Australia before the tariff crackdown.
“And our winery was part of that punch. We are a small winery and went along on the coat tails of larger wineries who can afford to market, people like Penfolds who are highly regarded in China,” he said.
“If we weren’t part of a bigger approach, and big companies supported by the Australian Government. we wouldn’t sell a bottle in China. With the relaxation of tariffs, I hope we can sell there again. Once the big companies start selling in China again, it will be good for the whole industry and smaller wineries like Water Wheel.
“We are basically starting with a new market. Luckily, China has retained a residual love for Australian wine.”
Mr Cumming said that before 2020, Australia and France each had about 40 per cent market share of the wine market in China.
“Other countries competed for the rest and not one had a double digit share,” he said. “Now Chile represents up to 30 per cent of the wine sent into China.”
Mr Cumming said the China lockout had contributed to a glut of wine in the Australian market.
“But there’s a glut all over the world. Whether cost of living or other reasons, people are not buying as much wine,” he said.
Mallee MP Anne Webster said supply concerns, including a glut of grapes, and the risk of non-tariff barriers back into the Chinese market still posed problems for growers.
And she said the Federal Government’s biosecurity tax would hit winegrape growers especially hard. Growers are hit for the grapes levy at $5 per tonne crushed, the research levy at 2 per cent per tonne now grape growers would pay their share of over $47 million annually from farmers in a biosecurity levy