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SA wine industry ‘cautiously optimistic’ on China tariffs call

The Chinese Government’s interim recommendation to wind back punitive tariffs on Australian wine is good news for South Australian exporters who lost their biggest market – but they’re not popping corks to celebrate just yet.

Mar 13, 2024, updated Mar 13, 2024
Photo: Riverland Wine.

Photo: Riverland Wine.

China is set to decide on whether it will lift tariffs of more than 200 per cent at the end of this month, but in an interim decision yesterday recommended dropping restrictions on Australian wine imports.

That’s been welcomed by the industry broadly, with South Australian winemakers and industry representatives “cautiously optimistic” that a final decision from the Chinese Ministry of Commerce (MOFCOM) will be made in Australia’s favour come 31 March.

Crushing tariffs were applied in 2020 after China’s relationships soured with the former Morrison Government, with local and national wine exporters left reeling and still counting the cost.

China was Australia’s top wine export market pre-pandemic, but dropped to 14th spot within a year after exports fell by $860 million. In the year to June 2023, South Australian exports to China were worth just $4.9 million.

Speaking to InDaily, Riverland Wine grower engagement officer Charles Matheson said the announcement was broadly “good news”, but that when exports to China do resume “it’s unlikely that it’s going to be anything like it was in the past”.

“But every bit helps,” Matheson said.

“That being said, it’s probably been a very good lesson to us all that we can’t just have all our eggs in one basket and we need to continue to add diversification and try and build further world markets.

“From a Riverland wine region point of view, what’s been going on in the UK because of supply chain issues and troubles because of interest rates is almost as big of an issue for the Riverland as China.”

He remained hesitant to celebrate: “We should wait until a final announcement before cracking the Riverland Rosé.”

“There is still a shrinking worldwide demand for shiraz, cabernet and merlot and as a result, we need to continue our push for supported structural reform.”

Matheson’s position was supported by Accolade Wines, which owns South Australian wine brands including Hardy’s, Petaluma, Banrock Station, St Hallett and Croser.

An Accolade spokesperson told InDaily that the company welcomed the positive news, noting that a final decision from China was pending.

“Should tariffs be removed, Accolade looks forward to the long-term growth opportunities that the China market presents for our business,” the company said.

“Australian wine has a well-deserved reputation for quality in China and that includes a number of our leading brands such as Hardys and Grant Burge.”

Industry body Australian Grape & Wine also welcomed the interim decision of MOFCOM.

“This is a positive step towards resuming trade with what was formerly our largest export market,” Australian Grape & Wine chief executive Lee McLean said.

“While we acknowledge this interim decision, we note that the final outcome is still pending. As such, we remain cautiously optimistic about the forthcoming decision and will await MOFCOM’s final determination.

“We appreciate the collaborative efforts from both the Australian and Chinese Governments, and industry partners, in working towards a resolution.”

Wine Australia also said it was pleased, “recognising that a final decision is still to come”.

“We will continue to work in close collaboration with the Australian Government and sector representatives to monitor and support our sector’s interests,” it said.

“We are working to provide relevant details to the businesses in our sector as new information becomes available.

“Mainland China remains an important market for the Australian wine sector.”

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