Farms & Farm Machinery #401

News
Due to China increasing tariffs on Australian wine,
alternative markets are required in order to offset
potential losses in revenue
Bitter notes
Australia must find new wine markets to avoid significant losses over
the next five years due to Chinese wine tariff , new data shows
Aussie wine grape growers are set to lose $67 million
annually unless new export markets are found for
Australian wine, according to new data released by
the Australian Bureau of Agricultural and Resource
Economics and Sciences (ABARES).
The finding comes with the release of a new
ABARES report Australian Wine in China: Impact of
China’s Anti-dumping Duties, which investigates the
impacts of China’s punitive anti-dumping measures
on Australian wine exports.
Additional duties were temporarily introduced
last year before the Chinese Ministry of Commerce
confirmed it would place the tariffs, which range
from 116 per cent to 218 per cent, on Australian wine
for five years from March 28.
The Chinese government says its actions are in
response to the Australian government subsidising
Australian winemakers, and allowing them to sell
wine below the cost of production – a claim both
winemakers and the Australian government
have disputed.
ABARES executive director Jared Greenville says
the duties will cause China’s imports of bottled
wine from Australia to cease entirely.
“We expect that only 60 per cent of wine destined
for China will find a place in our other existing
markets by 2025, unless we make the effort to find
alternative markets or do things differently,” says
Greenville.
“While Australia exports wine to over 100
countries, the Chinese market was the largest
in both export and volume for bottled wine,
accounting for 40 per cent of export value
share and 24 per cent of export volume share.”
Action is needed today to find new markets for
Australian wine, he adds.
“Without growing existing markets or finding new
ones, the export value of Australian wine in 2025 is
expected to be $480 million lower. The total cost
of the anti-dumping measures could be at least
$2.4 billion over a five-year period,” he says.
“For wine grape growers, the loss of production
would be $67 million annually. This represents
annual losses of $11 million in the Riverina, $11
million for the Victoria-North West region, $23
million for South Australia-South East region,
and $21 million for growers everywhere else.”
Without growing existing
markets or fi ding new
ones, the export value of
Australian wine in 2025
is expected to be $480
million lower. The total
cost of the anti-dumping
measures could be at least
$2.4 billion over a
five-year period
However, as Greenville says, “this isn’t to spell
doom and gloom”.
“It’s an outcome that can be avoided if we look at
finding other markets for Australian wine or find
ways to generate more value from our wine sold
into existing markets,” he says.
“The Australian wine industry is resilient, and
industry bodies and businesses have already had
success in diverting to other markets.
“Since the beginning of the year, Australian wine
exporters have managed to redirect around 30 per
cent of the wine destined for China. They’re well
on the way.”
New data from government-run research
body Wine Australia shows that exports of
Australian wine to the United Kingdom are at
their highest level in a decade, with the value
of exports increasing by 23 per cent to $472 million
and volume by 16 per cent to 269 million litres
(30 million nine-litre case equivalents), making the
UK the biggest destination for exports by volume
and the second by value.
Wine Australia corporate affairs manager Rachel
Triggs says exports also increased to Singapore,
South Korea, Malaysia, Taiwan and Hong Kong,
but they were not enough to offset the decline in
exports to mainland China.
Australian wine exports during 2020–21
declined by 10 per cent in value to $2.56 billion,
compared with the previous financial year, while
export volume declined by 5 per cent in volume
to 695 million litres (77 million nine-litre case
equivalents), according to Wine Australia’s latest
Export Report, released in July.
“However, excluding mainland China, exports
increased by 12 per cent in value to $1.96 billion
and increased by 6 per cent in volume to 643
million litres,” Triggs says.
Much of the decline in overall average value was
due to a drop in the share of bottled exports – from
45 per cent of the share of volume in 2019–20 to 39
per cent in 2020–21.
Triggs added that this was also a result of the
mainland China market tariffs, as it had predominantly
been a bottled wine market, and the growth
in exports to the UK was dominated by unpackaged
exports which were bottled in-market.
22 Farms & Farm Machinery