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Image: Wolfblur/Pixabay

More Tariffs on Wine

More Tariffs on Wine

Image: Wolfblur/Pixabay

Trade fight with China continues to hurt producers

The wine industry has once more been caught up in the trade battle between Australia and China.

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China has now imposed a new round of tariffs of 6.3-6.4% on Australian wine, due to claims winemakers are subsidised by the government.

Coming in on 11 December, they will remain in place through China's investigation into the matter, which is expected to last until August next year.

This is on top of a tariff of up to 200% that was announced by China last month, effectively halting all exports of Australian wine to the country.

Chief Executive of Australian Grape and Wine, Tony Battaglene, says while the additional tariff doesn't actually make all that much difference on top of the initial one, it feels like "an extra kick when you're already lying on the ground". With tariffs also placed on barley, beef and coal, he believes the wine industry is being caught up in an ugly trade war.

"Quite frankly I'm looked at the preliminary determinations and, while my Mandarin is not good, it's pretty clear that the arguments are not solid," he says.

"So we'll be putting in a response to this, as will the Australian government, which I think will refute those findings. But I don't think it will change the decision."

Winemaker Jen Pfeiffer, from Pfeiffer wines in Rutherglen, says the halting of Chinese exports will see a flooding of supply back into the domestic market.

"Then suddenly we'll be in a state of oversupply, which has a devastating effect for growers and producers, just driving the pricing down," she explains.

She says that the last period of oversupply the industry faced, in the mid-2000s, led to a lot of vineyards being pulled out. And then the industry got back into balance with the development of the Chinese wine market, which is estimated to be worth more than $800 million.

"And things have really been looking great in the Australian wine industry since," she says. "So, this could potentially be very crippling."

She believes the main course of action is for winegrowers to look for other export markets, which can be slow and expensive to develop, but have great potential.

Tony Battaglene says support from local winelovers, and a surge in domestic tourism, could also greatly help the industry.

"People want to travel, they want to spend their money domestically, and they really want to support the industry, and we just hope people get out and continue to do that," he says.

"Not just for the wine industry, but also for the whole of rural and regional Australia. It's got to be part of our path to recovery."

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