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Winemakers dudded by US giant Accolade Wines in China fight

A confidential note revealed the US-owned backer of some of Australia’s biggest wine labels has drawn a harsh line in the sand on tariffs.

Local winemakers have been left with a bad taste in their mouth by the decision of the foreign owner of some of Australia’s biggest labels not to back in their fight with China over crippling tariffs that have devastated their exports.

Instead Accolade Wines, which is owned by US private equity fund The Carlyle Group and holds iconic Australian labels including Hardy’s and Grant Burge, has refused to join a push by hundreds of local growers urging the government to take Beijing to the World Trade Organisation, citing fears China might retaliate against its own lucrative bulk wine business.

According to a confidential note sent to the board of industry group Australian Grape and Wine last month, Accolade executives met with the industry group and said they could not back a WTO action “due to concerns about retaliatory action from China which may be carried out on individual companies or the industry as a whole.”

Some of Accolade Wines' Hardy's range.
Some of Accolade Wines' Hardy's range.

This refusal came despite Australian Grape and Wine’s view that “the likelihood of retaliatory action against Australia if WTO action Is launched … is unlikely.”

Industry observers believe that Accolade’s decision may be related to their own efforts to sell bulk wine into China from other countries.

Currently, Beijing’s tariffs only apply to wine sold in bottles or containers of two litres or less, but according to the note, at a board meeting on April 7 representatives of Accolade said they were specifically concerned about China broadening their tariffs to take in bulk wine if the government pushed forward with action at the WTO.

And in another blow to Australian grape growers, earlier this month Accolade announced that it was going to source wine from third countries like Chile to sell into China and avoid the tariffs.

Accolade’s decision disappointed local winemakers like John Cassegrain of Cassegrain Wines in Port Macquarie.

John Cassegrain pictured in his vineyard at Port Macquarie on the NSW mid-north coast. Mr Cassegrain is the owner of Cassegrain Wines. Pic: Dan Himbrechts
John Cassegrain pictured in his vineyard at Port Macquarie on the NSW mid-north coast. Mr Cassegrain is the owner of Cassegrain Wines. Pic: Dan Himbrechts

“Exports represent 50 per cent of our business and China was about 30 per cent of that 50 per cent,” said Mr Cassegrain, who sources grapes from across NSW to produce a wide variety of wines including a sought-after chardonnay, and says he has a “container” of wine in his warehouse that was supposed to have been shipped to China weeks ago.

Mr Cassegrain says he “absolutely” backed the decision by Australian Grape and Wine to press for action in the WTO, and he cannot understand Accolade’s reasoning.

“I was very, very disappointed in Accolade taking a different opinion,” he said.

“We can’t understand why they did it. We’ve got friends in the industry who are also shaking their heads.”

“The government has the support of the majority of the industry, both small players and large players, that have been exporting to China,” he said.

William de Beaurepaire of De Beaurepaire Wines in Rylstone, NSW, which makes a number of highly sought after wines including chardonnays and pinot noir, said, “We’re proud that as an industry we’ve maintained a united front and stood up to the bullies by sending the dispute to the World Trade Organisation but there are fault lines that will be played upon. To have a major wine company like Accolade, deciding to go it alone, hurts us all as it lifts the pressure on finding a resolution for everyone.”

“We need strong government leadership to resolve this dispute and some help so we can continue to expand our exports to other markets.”

“This will ensure we don’t lose a lot of the industry’s smaller family businesses that provide much of the quality and vibrancy that Australians have enjoyed over the past 12 months as they’ve visited our regions,” he said.

Originally published as Winemakers dudded by US giant Accolade Wines in China fight

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Original URL: https://www.couriermail.com.au/news/winemakers-dudded-by-us-giant-accolade-wines-in-china-fight/news-story/df5333e22222c09b6ef549317769ec1a