A glass half full view of China

Wine trade hopes rising

THE recent thawing of relations between China and Australia could see the crippling 200 per cent-plus tariffs on Australian wine reviewed or even lifted after a spokeswoman for a Chinese government economic department hinted at possible talks and a resolution to the trade dispute.

China’s commerce ministry is reported to have said it was willing to discuss tariffs that it imposed on Australian wine following a diplomatic dispute that began in 2020.

The tariffs on Australian wine sold into China, which ranged from 116 per cent to 218 per cent, all but destroyed a billion dollar-plus market for Australian winemakers.

It saw an immediate collapse in sales of Australian wine to China, which before the tariffs hit a peak of $1.3bn in annual sales to only $12.4m for calendar 2022, as Chinese consumers switched to cheaper wines.

But as trade relations between Beijing and Canberra show some signs of improving, which has raised hopes of bans lifted on Australian coal as well as other products such as timber and lobster, the nation’s wine industry could soon have its trade sanctions addressed.

It comes as Federal Trade Minister Don Farrell has been invited to visit China.

The bruising impact to Australia’s wine industry from the tariffs imposed in 2020 have led to a complete collapse of the once billion-dollar export market in China. Recent industry data showed wine exports to China from late 2020 had relegated that market to Australia’s 23rd largest wine market, with exports falling another 58 per cent by value to $12m in 2022, down from $1.17bn in 2019.

Australia’s best known winemaker, Treasury Wine Estates, has seen its sales to China also massively shrink as its premier and luxury wine brands such as Penfolds and its famous Penfolds Grange wine faced a closed China market.

Treasury Wine chief executive Tim Ford suffered the loss of his most profitable market and has pushed through new initiatives such as sourcing wine for China from outside Australia, including a recent deal to sell a range of ‘made in China’ Penfolds for the local market.

The Australian government and wine industry organisations have been trying to bolster exports to the US in a bid to fill the hole left by the exit of the China market.