Wine ‘next in line’ to feel the wrath of China

Australia’s wine industry is being threatened with tariffs as China tries to pile pressure on Canberra, says industry veteran Doug Rathbone.

Rathbone wine group chairman Doug Rathbone. Picture: Aaron Francis

The Australian wine industry is being threatened with tariffs as China tries to pile pressure on the federal government, according to industry veteran Doug Rathbone.

Mr Rathbone, whose Rathbone Wines produces the Yering Station, Xanadu and Mount Langi Ghiran brands, said tariffs could come as early as this week, following a September announcement of a crackdown on dumping.

But he told The Australian and Visy’s Global Food Forum there was no evidence Australian wine producers were dumping wine. “It’s pretty obvious it’s political,” he said. “It is a bit like the barley industry, which is in a position where there is no justification for the tariffs on any commercial basis.”

The Australian barley industry is still reeling from the imposition of tariffs of 80 per cent in May which effectively killed its $1.2bn export market.

Coca-Cola Amatil managing director Alison Watkins, also speaking at The Global Food Forum, said China would continue to be a strong source of demand for Australian agribusiness.

“(China) is tremendously important for our country,” she said. “Demand for food globally is going to grow 70 per cent to 2050, and about 70 per cent of that is going to come from the Asian markets.

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“A big proportion of that, simply because of the weight of population, is going to come from China.”

She said the Australian agribusiness sector had developed very good relationships with China and it was “unfortunate” it had been caught up in other issues.

“Whether it is concerns about our strategic alliances, security, cyber, all of these issues are important,” she said. “However, it is equally important that we take a pragmatic approach and we continue to work on all fronts and very much that business continues to keep the channels open, that our government representatives keep the conversations moving.”

Also speaking at the forum, Brett Hosking, the chair of grain industry lobby group Grain Growers, said the imposition of the tariffs in May had “ripped the confidence out of the barley ­market”.

He said the announcement had led to the price of barley falling from about $270 a tonne in early May to as low as $70.

Mr Hosking said barley prices had since stabilised at a discount of about $40 to $50 a tonne to the pre-tariff prices.

“Confidence is a really big driver of good prices,” he said. “Having that confidence gone has meant the traders aren’t willing to extend themselves quite as far.

“The flow-on effect is being felt by our growers in the lower prices. It has had a flow on to our rural communities, including our footy clubs, our churches. There are just less dollars to go around.”

Mr Rathbone, whose company has been a long-time exporter of wine to China, said Chinese domestic producers were claiming Australian wine was being sold too cheaply and they could not ­compete.

But he insisted the Australian wine industry was able to produce wine at good prices because of ­efficient production methods.