Farms & Farm Machinery #401
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
News<br />
Due to China increasing tariffs on Australian wine,<br />
alternative markets are required in order to offset<br />
potential losses in revenue<br />
Bitter notes<br />
Australia must find new wine markets to avoid significant losses over<br />
the next five years due to Chinese wine tariff , new data shows<br />
Aussie wine grape growers are set to lose $67 million<br />
annually unless new export markets are found for<br />
Australian wine, according to new data released by<br />
the Australian Bureau of Agricultural and Resource<br />
Economics and Sciences (ABARES).<br />
The finding comes with the release of a new<br />
ABARES report Australian Wine in China: Impact of<br />
China’s Anti-dumping Duties, which investigates the<br />
impacts of China’s punitive anti-dumping measures<br />
on Australian wine exports.<br />
Additional duties were temporarily introduced<br />
last year before the Chinese Ministry of Commerce<br />
confirmed it would place the tariffs, which range<br />
from 116 per cent to 218 per cent, on Australian wine<br />
for five years from March 28.<br />
The Chinese government says its actions are in<br />
response to the Australian government subsidising<br />
Australian winemakers, and allowing them to sell<br />
wine below the cost of production – a claim both<br />
winemakers and the Australian government<br />
have disputed.<br />
ABARES executive director Jared Greenville says<br />
the duties will cause China’s imports of bottled<br />
wine from Australia to cease entirely.<br />
“We expect that only 60 per cent of wine destined<br />
for China will find a place in our other existing<br />
markets by 2025, unless we make the effort to find<br />
alternative markets or do things differently,” says<br />
Greenville.<br />
“While Australia exports wine to over 100<br />
countries, the Chinese market was the largest<br />
in both export and volume for bottled wine,<br />
accounting for 40 per cent of export value<br />
share and 24 per cent of export volume share.”<br />
Action is needed today to find new markets for<br />
Australian wine, he adds.<br />
“Without growing existing markets or finding new<br />
ones, the export value of Australian wine in 2025 is<br />
expected to be $480 million lower. The total cost<br />
of the anti-dumping measures could be at least<br />
$2.4 billion over a five-year period,” he says.<br />
“For wine grape growers, the loss of production<br />
would be $67 million annually. This represents<br />
annual losses of $11 million in the Riverina, $11<br />
million for the Victoria-North West region, $23<br />
million for South Australia-South East region,<br />
and $21 million for growers everywhere else.”<br />
Without growing existing<br />
markets or fi ding new<br />
ones, the export value of<br />
Australian wine in 2025<br />
is expected to be $480<br />
million lower. The total<br />
cost of the anti-dumping<br />
measures could be at least<br />
$2.4 billion over a<br />
five-year period<br />
However, as Greenville says, “this isn’t to spell<br />
doom and gloom”.<br />
“It’s an outcome that can be avoided if we look at<br />
finding other markets for Australian wine or find<br />
ways to generate more value from our wine sold<br />
into existing markets,” he says.<br />
“The Australian wine industry is resilient, and<br />
industry bodies and businesses have already had<br />
success in diverting to other markets.<br />
“Since the beginning of the year, Australian wine<br />
exporters have managed to redirect around 30 per<br />
cent of the wine destined for China. They’re well<br />
on the way.”<br />
New data from government-run research<br />
body Wine Australia shows that exports of<br />
Australian wine to the United Kingdom are at<br />
their highest level in a decade, with the value<br />
of exports increasing by 23 per cent to $472 million<br />
and volume by 16 per cent to 269 million litres<br />
(30 million nine-litre case equivalents), making the<br />
UK the biggest destination for exports by volume<br />
and the second by value.<br />
Wine Australia corporate affairs manager Rachel<br />
Triggs says exports also increased to Singapore,<br />
South Korea, Malaysia, Taiwan and Hong Kong,<br />
but they were not enough to offset the decline in<br />
exports to mainland China.<br />
Australian wine exports during 2020–21<br />
declined by 10 per cent in value to $2.56 billion,<br />
compared with the previous financial year, while<br />
export volume declined by 5 per cent in volume<br />
to 695 million litres (77 million nine-litre case<br />
equivalents), according to Wine Australia’s latest<br />
Export Report, released in July.<br />
“However, excluding mainland China, exports<br />
increased by 12 per cent in value to $1.96 billion<br />
and increased by 6 per cent in volume to 643<br />
million litres,” Triggs says.<br />
Much of the decline in overall average value was<br />
due to a drop in the share of bottled exports – from<br />
45 per cent of the share of volume in 2019–20 to 39<br />
per cent in 2020–21.<br />
Triggs added that this was also a result of the<br />
mainland China market tariffs, as it had predominantly<br />
been a bottled wine market, and the growth<br />
in exports to the UK was dominated by unpackaged<br />
exports which were bottled in-market.<br />
22 <strong><strong>Farm</strong>s</strong> & <strong>Farm</strong> <strong>Machinery</strong>