A sober look at exporting wine to China post-tariffs

Australian winemakers rejoiced when punitive tariffs on exports into China were recently lifted, but myriad non-tariff trade barriers remain according to an industry expert.

Apr 08, 2024, updated Apr 24, 2024

Stringent testing of wine, different labelling rules, and softer demand for alcohol in general are just some of the barriers Australian wine exporters will face when resuming trade with China.

According to Australian Women in Wine advisory board member Rachel Triggs “there’s a lack of appreciation for the fact that market access is not just all about tariffs”.

Speaking to InDaily, the industry expert said she wouldn’t criticise anyone for celebrating the lifting of Chinese tariffs on Australian wine, but that the industry must now focus on the numerous non-tariff trade hoops exporters must jump through to sell wine in China.

“There are non-tariff trade barriers on all commodities across all countries – it’s a very complex web,” she said.

“In the last Wine Australia export report, Australian wineries were exporting to 112 different countries, and it’s important to recognise that every single one of those countries has their own wine regulations, their own labelling regulations, their own customs and processes and domestic laws as far as distribution and liquor licencing goes.

“China is no different. China imposes its own testing, and they have their own regulations.”

Wine industry advisor Rachel Triggs said there was a “lack of appreciation” for non-tariffs trade barriers to China. Photo: Supplied.

Bottle labelling was a challenge for exporters even before tariffs were introduced, and many wine exporters will need to brush up on requirements now that the market has re-opened.

“They have their own regulations on labelling right down to ingredient labelling, sweetness, permitted additives and processing aids,” Triggs said.

“So even before the tariffs were imposed, China – largely by virtue of it being such a big market – was a market in which Australian exporters were experiencing quite a high incidence of non-tariff trade barriers.”

Strict testing requirements are further barriers faced by Australian wine exporters, she said.

“Ethyl carbonate and orchratoxin are both substances that are naturally occurring in wine but every now and again we would see a shipment rejected because the wine was tested and seen to have an unacceptably high level of those two substances,” Triggs said.

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“Another one is a processing aid called CMC (carboxymethyl cellulose). It’s rarely used in red wine, it’s usually in white wine, and regulators will say ‘we can’t evidence that CMC was not used in this product’ and they will reject it.”

The size of the export market is likely to be smaller too according to Triggs, who noted that wine consumption in China has been falling, as it is outside of China.

“The policy position of the World Health Organisation has changed significantly in recent times from trying to combat the harmful impact of alcohol to making a pledge to actually reduce the consumption of alcohol,” she said.

“[The WHO] has set a target to reduce global consumption of alcohol by 20 per cent by 2030, and they’re making member countries actually provide data as to how they’re going to achieve those figures.

“What it means globally – and this is not specific to China – is you’re going to see a real shift in most markets as to how alcohol is taxed and how freely it is being made available.”

How people are buying wine in China is changing, with Triggs saying it’s becoming common for people to order wine to restaurants via a Jimmy Brings-style platform rather than selecting a drop from in-restaurant wine lists.

Triggs said Wine Australia has an export guide for China for anyone looking to navigate the complex web of non-tariff trade barriers.

There have also been funds pledged to assist with market access, including by the state government.

South Australian premier Peter Malinauskas recently announced a $1.85 million support package, including marketing, advisory and technical assistance, to help the state’s winemakers return exports to pre-tariff peaks.

The $1.85 million package includes more than $1 million for marketing activities and campaigns, industry events in China, and reciprocal visits.

“The fact that those political tensions have eased and those tariffs have been dropped on Australian wine imported into China doesn’t necessarily mean that all those non-tariff trade barriers fall away,” Triggs said.

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