Page 12 - Food & Drink Magazine Jan-Feb 21

WINE EXPORT UPDATE
Re-engaging with Asia
In late 2020, China imposed severe tariffs on Australian wine. Asia Wine Hub founder Jeremy Oliver asks, what now?
THE Chinese government’s imposition of crippling trade restrictions upon imports of Australian wine has given the local wine industry a $1.2 billion headache. With warehouses, containers, logistics systems and even ships packed with wines destined for China – packaged and labelled specifically to meet Chinese customs and customer requirements – this headache that started as a dull throb has become a lot more intense of late.
China has now doubled down with a formal tariff of 6.3-6.4 per cent on top of its new duty deposits (payable by importers) of between 107-212 per cent. On the one hand, that’s nothing more than a flick in the eye after a knockout blow, but on the
other it potentially paves a way for a more liveable solution in time. Let’s wait and see.
It’s my view that more than half of Australia’s wine exports to China by value relate to exports from Australia by Chinese citizens as part of a procedure to gain visas and permanent residency in this country – as part of a highly organised process given full legitimacy by our federal and state governments. Much of this wine is OEM (Buyers Own Brand) at very low levels of quality, so it doesn’t fit into the category of quality branded wine that is now seeking an alternative market. Which leaves this market category with a $550 million problem.
Anyone believing there is a simple, effortless and straightforward solution to this by simply finding new customers somewhere else is either listening to too much talk radio or our politicians, many of whom seem to believe it’s as easy as flicking a switch.
But there is truth in the notion that our recent concentration on the China market and its ability to absorb huge volumes at high prices has caused our wine producers to neglect other markets in the Asian region to the extent that they now feel ignored and taken for granted.
This is not helped by a lack of cultural awareness still shown by Australian producers. I have
12 | Food&Drink business | January/February 2021 | www.foodanddrinkbusiness.com.au