China wine tax: Australian wine sector calls for rescue package, warns of massive job losses

Winemakers are calling for a rescue package, warning ‘tens of thousands’ of jobs will be lost if there isn’t support following China’s wine tax.

Tens of thousands of wine industry jobs will be lost and wineries will close without a dedicated rescue package, the sector is warning the Federal Government.

Australian Grape & Wine is calling on Scott Morrison to dedicate millions of dollars in the May 11 Federal Budget to help save the industry.

With the $1.2bn Chinese market effectively closed due to huge tariffs on Australian wines, the sector is calling for $53.4m to fast-track new trade deals and promote local products in international trade forums.

In a submission to the Treasury Department as Budget preparations start, Australian Grape & Wine chairman Sandy Clark said the industry’s immediate situation was “dire”.

He warned there would be significant job losses – “likely in the tens of thousands” over the next decade – if trade tensions with China continued and the import tax on Australian wine was to become permanent.

“The economic damage already being experienced will compound over time, and the severity of job losses and economic downturn would be felt most acutely in rural and regional Australia,” he said.

“Without assistance now, there is a real risk that a large number of grape and wine businesses will be forced to close permanently in the near future.” Mr Clark said 2020 had been “the most challenging year on record” for grape and wine businesses hit by bushfires, COVID-19 and China’s wine tax.

The bushfire-affected vineyard of Tilbrook Estate Winery, Lobethal. Picture: https://www.instagram.com/tilbrookestate/

The industry body made 19 recommendations to help save the sector.

They included federal funding for a new research winery at Adelaide University’s Waite Campus, an extra $10m in grants for winemakers to upgrade cellar doors and $7m in refunds for winemakers charged export fees in 2019-20.

Another recommendation was to invest in a dedicated wine-focused tourism campaign, to be delivered by Tourism Australia in consultation with the sector. “Visitors to Australia’s wine regions enjoy the diversity of offerings at cellar doors. If this diversity is diminished, tourists will potentially lose interest and choose alternative holiday destinations,” the submission read.

The SA Tourism Commission (SATC) has already launched its own campaign, dubbing 2021 the “Year of South Australian Wine”.

SATC chief executive Rodney Harrex said: “While international tourism is off the cards, we’re getting behind our state’s world-class wine sector to drive visitation and spending across SA’s wine regions, and grow wine events and experiences to increase wine tourism.”

Primary Industries Minister David Basham said SA’s wine industry was a “critical part” of the state’s economy.

“Given the challenges the industry has faced recently we are calling on everyone to do what they can to support our local producers.”

Nationally, about 160,000 people are employed in the sector, which contributes an estimated $45.5bn to the economy across grape-growing, winemaking and wine-related tourism.