By Callum Ludwig
China’s tariffs on wine look set to be lifted by the end of March in a move that should result in a huge boost to the Australian wine industry.
As reported by the ABC, China’s Minister of Commerce Wang Wentao and Australian Trade Minister Don Farrell have met continuously over the last four months and the tariffs are expected to be removed by the conclusion of China’s review on 31 March.
In an interview for the ABC Afternoon Briefing with Greg Jennett, Mr Farrell said his latest meeting with Mr Wentao was his sixth in the last 18 months.
“He made it clear that their processes were on track, and we would get a result by the end of March,” he said.
“I’m very confident that the discussions I had yesterday with Wang Wentao will result in them carrying through on what they undertook to do, which was to expedite the review of the tariffs.”
The Australian Government suspended its dispute with the World Trade Organisation (WTO) regarding the tariffs in October last year after China agreed to conduct a five-month review.
Mr Farrell said it’s not just bulk wine producers that have been affected.
“The loss of that largest trade market affected winemakers right around the country, including in my own town of the Clare Valley. I’ve seen, very tragically, local winemakers simply leave their grapes on the vines,” he said.
“We have made it very clear that we want those bans lifted. We want them lifted in the time frame that we have discussed. If we don’t get them lifted, then we will resume our World Trade Organisation dispute.”
Handpicked Wines has vineyards in Yarra Glen and Gladysdale and has exported wines from its vineyards across the country to China.
Chief winemaker Peter Dillon said the impact of the tariffs was significant for them as China was a key market for their exports.
“Because of what wines were preferred by the market there, we probably saw the bulk of our South Australian ‘reds’ going into China, so when the tariffs came in, that pretty much dried up overnight,” he said.
“It obviously had a huge and significant impact on the business and where those wines go, just as it would have for so many other Australian producers.”
In March 2019, Handpicked Wines held its largest Chinese distributor visit after experiencing huge growth in markets across Asia in the years prior, inviting 120 of its top-performing distributors to Australia.
Mr Dillon said the timing of the tariffs was also absolutely huge.
“At the time the tariffs had come in, Australia had just got to the top position as the number one importer by country, we had just managed to overtake places like France and Chile to get to the pole position,” he said.
“If you consider the size of that market and the quantity of Australian wine that would have been going in, it would have affected a huge portion of the Australian industry, particularly for the producers in the southeast of Australia.”
Before the tariffs were introduced, Australia’s export of wine to China was raking in $1.3 billion annually, which tanked to only $10.1 million in 2023 according to Wine Australia’s Export report.
Mr Dillon said it would be fair to say there’s a lot of excitement out there about the prospect of the tariffs coming off.
“The boost is going to be twofold; in a mental sense, the relief that will come for a lot of people who probably have been doing it slightly tough will be significant,” he said.
“Once it opens there’s going to be a little bit of a delay because, like any relationship that you haven’t been engaged or active with for a number of years, people will have to find their way to a certain extent and rebuild those relationships in terms of importers and distribution,”
“But I think that’s a challenge that everyone’s looking forward to embracing in reality.”
The tariffs were originally imposed in late 2020 after a diplomatic fallout between the two countries over investigations into the spread and origins of Covid-19, which then Prime Minister Scott Morrison endorsed an inquiry into. Tariffs were also applied to barley, beef, cotton, lamb, lobsters, timber and coal.
Mr Dillon said he hopes the Australian government will keep fighting on behalf of the industry should the tariffs not be lifted.
“We definitely would be hoping that the government would be mindful of the position that the Australian industries are in, especially given I think there’s so much promise there with industries like the barley industry, which has had some success there,” he said.
“In many ways, we’ve got a pretty positive outlook and are pretty hopeful, but we’re still holding our breath to a certain extent and won’t get too ahead of ourselves.”
