Industry reacts to China’s removal of wine tariffs

Winemakers and associations across Australia have welcomed the news that China has agreed to lift its restrictive tariffs on Australian wine.

Last week the Chinese Ministry of Commerce said that the tariffs, which were imposed in 2020 and devastated a $1.2bn industry for Australian winemakers, would be removed as of Friday, 29 March 2024.

Australian Grape & Wine Chief Executive Lee McLean described the move as a very important decision for the Australian wine industry, adding: “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 grape growers and winemakers throughout the process.”

McLean also said: “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.

“We look forward to seeing Australian wines back on Chinese dining tables and rejuvenating our relationship with customers and business partners in that market.”

The South Australian Wine Industry Association (SAWIA) also welcomed the news, with President Kirsty Balnaves saying: “This decision is important and highlights the ongoing strengthening of Australia’s trading relationship with China, for the mutual benefit of both countries.

“Significant trade exists between China and Australia, and the removal of import duties on wine will result in South Australian wine businesses re-considering the China wine market and allocating wine to the market.

“This will be based on several important factors, principally, a market risk assessment, acknowledging the importance of market diversification.”

The South Australian Government also announced a $1.85m China Re-Engagement Support Package for the state’s wine exporters and grape growers.

SAWIA Chief Executive Inca Lee said: “The announcement by the Premier of the China Re-Engagement Support Package for South Australian wine exporters is warmly welcomed by industry.

“We also thank the Premier for his foresight in leading a delegation to China in late 2023 in support of the Australian Government’s ongoing efforts to strengthen Australia’s relationship with China.”

Wine Australia CEO Dr Martin Cole highlighted while trade and consumer sentiment for Australian wine remains positive in China, there are some big differences Australian exporters will need to navigate.

“The wine market in mainland China is different now to what it was at the end of 2020,” Dr Cole said. “Wineries seeking information to re-enter the market are encouraged to review the Export Market Guide, market insights and sign up for information about upcoming activities at wineaustralia.com.

“We will support the Australian wine sector to re-enter the market through a coordinated set of activities and advice on market requirements, while continuing our market diversification efforts in other markets.”

Winemakers also welcomed the news with Treasury Wine Estates CEO Tim Ford describing the news as a cause for celebration.

Ford said: “Treasury Wine Estates has remained committed to China as demonstrated by our continued investment in the market through our local presence with more than 120 team members and partnerships contributing to Penfolds continued strong brand awareness in China.

“This announcement signals the start of our ramp up to re-establish our Australian luxury and premium wine distribution in China and it shouldn’t be too long before local Chinese consumers have more access to our great wines.

“It’s fantastic news for the Australian wine industry and opens the door for renewed opportunities for local winemakers and growers, particularly in regional Australia.”

Andrew Calabria, Sales & Marketing Director of the Calabria Family Wine Group, expressed enthusiasm over the welcomed news.

“This is a significant development for the Australian wine industry. The removal of tariffs signifies an important milestone that will reignite trade relations and foster growth within our industry.

“As an Australian wine producer, we understand the immense challenges faced by our industry due to the imposed tariffs. The past three years has shown the resilience and adaptability of our Australian winemakers, who have navigated the challenging market conditions.”

Calabria added: “We would like to thank the Australian government and industry stakeholders for their efforts in achieving this welcomed outcome.”

James Wilson, Senior Market Manager, Asia Pacific & Emerging Markets at Casella Family Brands, told The Shout: “Casella Family Brands welcomes this agreement, which creates a pathway forward to allow Australian wine to be sold in the Chinese market again.
Over the last few years, we have continued to foster our relationship with our importer, Telford Wine and Spirits, with whom our partnership spans 20 years, and together we are actively planning our re-entry into China.

“We have a fantastic and loyal consumer base in China, where [yellow tail] wines have been available since 2007. As one of the largest imported wine markets globally, we look forward to re-engaging with our loyal cohort of consumers, who appreciate the wonderful quality and consistency of our wines. We are committed to growing our brand presence and investing in the market once again.

“Removal of the tariffs presents positive outcomes and greater choice for Chinese consumers, and we hope it will add to the continued development of the wine category in China.”

Australian Vintage Chief Executive Craig Garvin told The Shout: “We are happy to hear the news from the Chinese Ministry of Commerce that all import tariffs on Australian bottled wine products have been removed.

“The removal of the tariffs will be a significant benefit for the Australian wine export industry and Australian Vintage. We have strong partnerships in China and are excited to be working with them. We look forward to our wines being back in the hands of Chinese consumers.”