Chinese tariffs on wine has cost Victorian makers $126m

Victorian wine exports have plunged since China whacked the nation with trade war tariffs, delivering wineries across the state a punishing blow. And there’s little sign of light.

Victorian exports of wine have plunged by one-third since China whacked the nation with trade war tariffs, delivering wineries across the state a punishing $126m blow.

Victoria has emerged as a key loser in China’s targeting of the nation’s wine industry with local exports plunging 33 per cent to $256m in the year to September, numbers from Wine Australia show.

The drop in Victoria is greater than that recorded by the nation’s other key wine producing states, with South Australia and New South Wales recording a 23 per cent fall and Western Australia posting a 27 per cent drop.

China first imposed tariffs of up to 220 per cent on Australian wine in November last year before extending them for 5 years in March.

Yering Station owner Darren Rathbone. The winemaker used to send 10 per cent of his product to China. Picture: Tim Carrafa

At a national level, wine exports fell 24 per cent to a five-year low of $2.27b in the year to September.

They were dragged down by a 77 per cent plunge in exports to mainland China which totalled $274m, although local producers managed to lift exports to places such as the UK and Hong Kong.

Yarra Valley winery Yering Station sold about 10 per cent of its product in China before tariffs hit.

Owner Darren Rathbone said China was a valuable market to lose given drinkers there were more than willing to seek out expensive drops.

“China was a really good market for us and we were growing quickly there but it has been unworkable for us since the tariffs came in,” he said.

“We hope it will open up one day but the politics between our two countries doesn’t look good.”

Wine Victoria chair Angie Bradbury says while Victorian winemakers are seeking out new markets, they take time to develop.

Mr Rathbone also owns Mount Langi Ghiran winery near Ararat and Xanadu in Western Australia.

Wine Victoria chair Angie Bradbury said the local industry had endured bushfires, Covid lockdowns and Chinese tariffs.

While businesses had sought out new markets and sales channels – both local and international – these opportunities took time to build, Ms Bradbury said.

“I really don’t think we have seen the end of the pain for the sector, it will be another 6 to 12 months before we see the full ramifications,” she said.

Ms Bradbury said sector needed ongoing support from the government to promote local winemakers and reach new markets.

“We are really going to need our domestic market to be very strong,” she said.