China to remove import duties from Australian bottled wine

The Australian Government announced that China will remove its duties on Australian bottled wine on 29 March 2024. The removal of duties means that Australia will discontinue its legal proceedings at the World Trade Organization.

The Chinese tariffs placed on Australian wine back in 2020 were a major blow for Australian bottled wine exporters as China was Australia’s biggest market at the time, with exports worth over $1.1bn in 2019. According to a recent Rabobank report, the wine industry is now “swimming in oversupply”, so even if Chinese consumption of Australian wine recovers quickly now that the tariffs have been removed, this would “not be a panacea” for all, as Australia’s wine industry is still facing at least two years to work through its current wine surplus.

The final decision from the Chinese Ministry of Commerce (MOFCOM) to remove import duties on Australian wine products was welcomed by Australian Grape & Wine. While the sector said it is well positioned for re-entry into China, it is planning to keep on with diversifying its export footprint.

“The Australian wine sector has made a long-term commitment to building the market for Australian wine in China, with many wine companies having developed close relationships with importers, buyers and consumers of Australian wine over many years,” said Australian Grape & Wine Chief Executive Lee McLean.

“We are working closely with the Australian Government and Wine Australia to ensure a coordinated approach is taken to re-entry and that the sector is well positioned to re-establish trade relationships.

“We look forward to seeing Australian wines back on Chinese dining tables and rejuvenating our relationship with customers and business partners in that market,” McLean said.

“We will also, however, be maintaining our focus on diversifying our export footprint and growing demand here in Australia as well.”

Taskforce to provide more help to the industry

Earlier in March 2024, it was announced that a viticulture and wine sector working group would be established to help the wine industry. Comprising representatives of the federal, state and territory governments, Wine Australia, Australian Grape and Wine and other relevant groups as agreed by the working group, the group will provide recommendations to agriculture ministers to address the challenges facing growers.

The working group is expected to visit regions most impacted by the oversupply, including the Riverland in SA and the Riverina in NSW, and will report back to agriculture ministers out of session by the end of April 2024. The working group will also propose to agriculture ministers actions to support improvement in the grape and wine sector and its long-term viability by July.

Image credit: iStock.com/Edsel Querini