China Officially Lifts Punitive Tariffs on Australian Wine

By | 29 March 2024

Australian Prime Minister Anthony Albanese has announced that the 218% tariffs imposed by China on Australian wine will be lifted on Friday, March 29.

“This is a welcome development, particularly for the Australian wine industry,” commented the Australian government in their statement. “Allowing Australian bottled wine back into the Chinese market will not only benefit Australian producers but also Chinese consumers.”

In 2020, China was recognized as the largest market for Australian wines, accounting for 40% of their total exports. Nonetheless, following a diplomatic disagreement, the Chinese government slapped punitive tariffs on Australian wine as well as barley, timber, coal, cotton, and other goods.

The Chinese government was already displeased with Australia’s decision to exclude the Chinese company Huawei from participating in the country’s next-gen phone network rollout.

Canberra then called for an international inquiry into the origins of the Covid-19 pandemic in Wuhan, which proved to be the final straw for the Chinese Communist Party.

By the end of 2021, Australian wine exports to China had fallen by 97%, and Wine Australia closed its Shanghai office.

The Australian government said the tariffs had ‘effectively made it unviable for Australian producers to export bottled wine to that market’. However, tensions between Canberra and Beijing have eased in recent months.

In October 2023, Australia agreed to suspend a complaint about the wine tariffs at the World Trade Organization. That move was followed by positive talks between Albanese and Chinese President Xi Jinping.

The Chinese Ministry of Commerce has decided to remove the substantial tariffs on Australian wine.

Albanese, foreign Minister Penny Wong, and trade Minister Don Farrell said in a joint statement ‘This result emphasizes the calm and consistent method used by the Labor Government, which is similar to the successful strategy employed to eliminate Australian barley duties. We recognize and appreciate the courage and backing Australian grape cultivators and wine manufacturers have demonstrated during this trying period.’

The past few years have undoubtedly been tough for Australian producers. There has been a decline in exports in major markets such as the USA and the UK due to inflation, and producers have had to exterminate millions of vines because of a worsening overproduction crisis.

Positive news has been sparse, hence wine manufacturers are rejoicing over the Chinese government’s decision to abolish the tariffs.

Treasury Wine Estates CEO Tim Ford expressed: ‘The abolition of levies on Australian wine exports to China is excellent information and calls for a festivity across the Australian wine sector and with our collaborators and purchasers in China.’

‘We are grateful to the governing bodies in Australia and China for non-stop efforts to steady relations between both nations, with this work in progress as we carry on fostering our local wine production ties in China.’

‘This proclamation indicates the commencement of our acceleration to re-setup our Australian luxury and superior wine distribution in China, and it shouldn’t be an extended time before local Chinese consumers have increased accessibility to our outstanding wines.’

Robert Foye, CEO at Accolade Wines, stated that the company does not foresee an instantaneous return to 2020 trading levels, however added that ‘we are thrilled about the long-term potential this market offers’.

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