China wine exportsBusiness

Australian wine exporters crushed by China tariff blow

Australian Grape & Wine said it will focus its attention on driving growth in developing markets following this week’s announcement that China will apply duties of up to 218.4% on most Australian wine exporters.

China’s Ministry of Commerce of Commerce (MOFCOM) has released its final determinations on investigations into allegations of dumping of Australian wines in China and trade distorting subsidies (countervailing duties), applying duties on imports of all bottled, still wines from Australia.

“While it’s disappointing, the industry is not surprised by today’s decision,” said Tony Battaglene, Chief Executive of Australian Grape & Wine. “We continue to reject the allegations levelled against Australian Grape & Wine members and have approached both investigations as collaboratively and transparently as possible.”

Trade Minister Dan Tehan said the tariffs meant it was “basically impossible” for Australian wine to be competitive in the Chinese market.

“This decision which has been taken by the Chinese government is extremely disappointing and completely unjustifiable,” Tehan told reporters in Melbourne.

“We will be looking at next steps, and those next steps will include looking at taking this matter to the World Trade Organisation.”

Battaglene said the industry had been preparing for this outcome.  “Our focus now is two-fold. Firstly, we’re working with industry and the Australian Government to assess options available to us within the Chinese system, and internationally. And secondly, we’re focusing on growing demand for Australian wine in other markets across Asia, Europe, US, and the UK,” he said.

“We have worked closely with the Australian Government throughout this process and I want to thank Ministers for the work they have done in what has been a very challenging period for everyone”.

“The Australian Government’s $72.7 million investment to help agribusinesses expand their export markets is a great first step to getting on with the job of finding new markets for Australian wine. It’s going to take collaboration, hard work and commitment, but if we work together we’re confident that we can drive growth in market access and sales in a range of markets in the coming years.”

China declared “lost market” for Australian winemakers

Pernod Ricard looks to India

Pernod Ricard Winemakers chair and chief executive Bryan Fry told The Australian earlier this month that India held incredible potential for Australian winemakers.

The country has more than 700 million people above the legal drinking age and a booming economy with a middle class eager to sample all things Western.

Pernod Riccard Sydney Office Portraits.

“Any diversification strategy needs to look at India,” Fry (above) said.

“And it is a diversification strategy. There are a number of markets that are really quite interesting, India is one, but actually a number of other countries, like Vietnam is a classic, you’ve got Russia.

“But India is the big one. We have 14 million drinkers in Australia, who can have alcohol, and every year in India 19 million ­people make the legal drinking age and that is the scale we need to be looking at.

“We have done some comprehensive research with consumers. Wine is by far the most interesting category out of spirits, beer and wine, and that’s driven very much by the female consumer and also a general movement away from hard spirits for many of the Indian drinkers.”

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