China drops tariffs on Australian wine

China has dropped its tariffs on Australian wine after years of sanctions that crippled the billion-dollar export industry.

The Chinese Ministry of Commerce said on Thursday afternoon it “would terminate the collection of anti-dumping duties” on imported Australian wines from March 29.

Australian wines in Beijing. Credit: Sanghee Liu

Prime Minister Anthony Albanese said the Australian government welcomed the decision and confirmed it would drop its case against China at the World Trade Organisation.

“The re-entry of Australian bottled wine into the Chinese market will benefit both Australian producers and Chinese consumers,” he said.

The tariffs of between 107 and 212 per cent were introduced in 2020 on some of Australia’s best-known wine brands. They followed multiple diplomatic disputes between Canberra and Beijing over human rights, national security and COVID-19 that saw all ministerial contact cut off between the two governments.

The ministry accused Australian winemakers, including Treasury Wine Estates, of dumping wine in the Chinese market at cheaper prices, forcing out competition from local vineyards. The allegations were rejected by Australian exporters and the government.

The ministry said on Thursday the decision to drop the tariffs was made after reviewing the market in China.

“The Ministry of Commerce ruled that in view of changes in the situation of the relevant wine market in China, it is no longer necessary to impose anti-dumping and countervailing duties on imported relevant wines originating from Australia,” it said in a statement.

Beijing on Wednesday won a WTO case against Australia over tariffs applied to $60 million worth of Chinese steel products, including railway wheels, wind towers and stainless steel sinks.

The WTO panel found that Australia’s Anti-Dumping Commission had acted inconsistently with some articles of the anti-dumping agreement.

Treasury Wines, which owns the Penfolds brand, said it would now look to expand its operations in China after losing 97 per cent of its market when the tariffs were implemented. Australia’s wine exports to China were worth $1.1 billion in 2019.

“Since the tariffs were introduced 3½ years ago, our commitment to China has been resolute,” Treasury Wines chief executive Tim Ford said.

“We now look forward to partnering with our local customers to re-establish our Australian [portfolio] in the market while continuing to be a meaningful contributor to the development and growth of the Chinese wine industry.”

Albanese said he expected Australian wine exports to China to reach new highs, but that optimism has been tempered by China’s economic downturn which has seen wine sales fall across the country.

Accolade Wines chief executive Robert Foye said he did not expect trade to return to pre-pandemic levels.

“While we do not anticipate a snapback to 2020 levels, we do see a sizeable opportunity for our business in China and we are excited about the long-term potential this market brings,” he said.

The Chinese government also banned Australian coal, lobsters, barley and half a dozen other export items worth about $20 billion during the tumultuous period between 2020 and 2023. The trade strikes on multiple industries led the former Coalition government to accuse Beijing of economic coercion.

Coalition trade spokesman Kevin Hogan described the wine tariffs as “illegal and punitive”.

“China, under its ‘wolf warrior’ diplomacy put 14 conditions on Australia in 2020 to normalise the relationship,” he said. “This was unreasonable. And this move today is indicative of China continuing to move away from this kind of diplomacy.”

Tariffs on Australian barley were dropped in August and verbal instructions to stop importing Australian coal were lifted early last year. Since then, China’s imports of Australian coal have increased by 3188 per cent year-on-year, according to Chinese customs data released on Wednesday.

Albanese said the government would continue to press Beijing to remove all remaining trade restrictions on Australian exports, including lobsters and beef.

“The Australian government’s approach is to cooperate with China where we can, disagree where we must and engage in our national interest – the outcomes on barley and wine reflect that approach,” Albanese said.

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