China-Australia trade: Wine industry braces for fallout from tariff hit

Australia’s wine industry says the fallout from China’s wine tariffs will be felt right through the supply chain.

The range of Australian wines on offer at Chinese supermarkets may be affected by the introduction of new tariffs.

AUSTRALIA’S wine industry is scrambling to find new markets, as the entire supply chain awaits to see the flow-on effects from China’s punishing tariffs on wine imports.

Tariffs up to 212.1 per cent are being applied to Australian product from this week, including on wine exports already at sea.

And winegrape growers are anxiously awaiting indicative pricing from wineries over the coming weeks to know how greatly they have been affected.

China announced the interim tariffs on Friday, after earlier this year accusing Australia of dumping cheap wine in its markets.

Treasury Wines – one of the biggest exporters to China – on Monday said it would redirect focus to other premium markets such as Taiwan and South Korea, after learning it would be hit with tariffs of 169.3 per cent.

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Brown Brothers chief executive Dean Carroll said the family-owned business had three containers of wine en route or sitting at Chinese ports that would be slapped with new tariffs.

While Brown Brothers would not turn its back on China, Mr Carroll said work would ramp up to pursue markets such as Singapore and South Korea, as well as emerging markets such as Malaysia and Vietnam.

Murray Valley Winegrowers executive officer Paul Derrico said growers in the vast Murray Darling wine region – Australia’s third largest – were unsure of the trickle-down effects of China’s latest edict.

“Until wineries start coming out with prices, we don’t know the effect. It’s difficult to quantify, but the sudden reduction of a market this big will certainly have repercussions across the industry nationally, including the Murray Darling and Swan Hill regions,” Mr Derrico said.

The Federal Government, meanwhile, has given its strongest indications yet that it will take China to the World Trade Organisation after putting anti-dumping tariffs of more than 80 per cent on Australian barley.

Grain Growers chair Brett Hosking said the group would support a WTO challenge.

“Our growers believe in trading fair and that’s what we’ve always endeavoured to do,” he said.

“Any suggestion we’re not goes to the integrity of growers, and we’d like the umpire to rule on that.”

Prime Minister Scott Morrison earlier this week said the Government would be “looking to see how we can get a number of our producers through this difficult time”, as it had done by introducing airfreight subsidies for exports during COVID.

Mr Hosking did not believe farmers were necessarily interested in subsidies or financial assistance, but would welcome more help in expanding markets or developing manufacturing to value-add to goods.

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