A new report from the Australian Bureau of Agricultural and Resource Economics and Science (ABARES) has revealed the devastating China tariff impact on Australian wine, following the government announcing a $1million fight-back grant.
Minister for Agriculture and Northern Australia David Littleproud released details of the $998,000 grant to Australian Wine & Grape last week, which is aimed at helping the industry explore opportunities to diversify its overseas markets.
According to the ABARES report, the punitive China tariff situation could cost the Australian wine industry billions over the next five years. It said only about 60% of wine destined for China would find a place in Australia’s existing markets by 2025 unless efforts were made to find new buyers or to do things differently.
“The total cost of the anti-dumping measures could be at least $2.4 billion over a five-year period,” Executive Director Jared Greenville said.
“While Australia exports wine to over 100 countries, the Chinese market was the largest in both export and volume for bottled wine, accounting for 40% of export value share and 24% of export volume share.
Without growing existing markets or finding new ones, the export value of Australian wine in 2025 is expected to be $480 million lower.
“The Australian wine industry is resilient, and industry bodies and businesses have already had success in diverting to other markets,” Greenville added.
“Since the beginning of the year, Australian wine exporters have managed to redirect around 30% of the wine destined for China. They’re well on the way.”
Exploring new export markets following China tariff fall out
The plan is for the grant to deliver two marketing and promotion pilots for Australian wine, Minister Littleproud said.
“These pilots will look to get consumers on board in countries where there is great potential for growth – in this case, Japan and South Korea,” he explained.
“There is an enormous amount of untapped potential in these markets, and the more inroads we can make into new markets the better off our winemakers, exporters and grape growers will be.
“It’s our job as a government to work with our state counterparts, industry and our Agriculture Counsellors to make sure we are all working together to make the most of these opportunities for Australian businesses.”
Tony Battaglene, CEO of AGW, said that the grant would be used to concentrate on consumer engagement and promotion.
“We’re looking at finding new ways to engage directly with consumers, in partnership with retailers,” Battaglene said.
“Australian wine has a great story to tell – we provide a clean, green, high quality product. By improving our engagement with consumers, we can find better ways to get our message across.
“This is the critical first step in a much broader market diversification program that will provide Australian grape and wine businesses, and the regional economies that rely on them, a sustainable future.”
Battaglene added that grape growers and winemakers across Australia have been dealing with an incredibly difficult period over the last couple of years, with fires, smoke, COVID-19 and China’s import duties on Australian wines all taking their toll.
“This investment will establish a framework for our sector’s effort to explore new market opportunities and overcome the challenges in front of us,” he said.
‘’For Australia’s grape and wine sector to mitigate the impact of the $1.2 billion gap left by the effective closure of the China market to Australian wine exports, grape growers and winemakers require a strategy to drive growth in a broad range of export markets. This grant will deliver a clear and coordinated roadmap for investment and activities across the Australian wine sector to deliver increased market access and growth in key target export markets.’’
Australian Grape & Wine will be working closely with Austrade, Wine Australia, the Department of Agriculture, Water and the Environment, and State Government agencies, to make sure the activities to be pursued complement existing and future efforts.
“We are an export focused industry, and this support will allow the industry to do the work that is needed to drive new opportunities for grape and wine businesses in a range of new and exciting markets,” Battaglene concluded. “We’re going to work closely with a range of people and organisations to bring this exciting suite of activities to life and maximise every
dollar we can for the benefit of grape growers and winemakers across the country.”