China seeks deal to end Australian wine tariffs

China’s Commerce Ministry has proposed a deal to end the crippling tariffs it has placed on Australian wine.

According to a report in China’s official newsagency Xinhua Ministry of Commerce spokesman He Yadong said: “We are willing to meet the Australian side halfway, further enhance mutual trust and co-operate on the basis of the settlement of the barley case dispute.”

China imposed of heavy tariffs of up to 218% on Australian wine in late 2020, with about 800 Australia wine exporters affected. The devasting impact saw export values collapse 99%.

A “package” resolution to the trade dispute would include Chinese anti-dumping and countervailing measures on Australian wine and similar Australian measures against three Chinese products, such as wind towers, railway wheels and stainless steel sinks, which could free up trade once more between the two countries.

He Yadong said China and Australia had been discussing ways to address the trade dispute since the beginning of 2023.

“After many rounds of discussions, both sides agreed that they will continue to work together actively to seek a prompt resolution of our other disputes, [China‘s] anti-dumping and countervailing duty measures on wine from Australia and [Australia’s] anti-dumping and countervailing duty measures on certain products from China,” he said.

Prime Minister Anthony Albanese also raised the issue of wine tariffs with Chinese premier Li Qiang at the Asean meeting in Jakarta this month.

“It is in Australian wine producers’ interest to export wine, but it is also in China’s interest to receive it,” he said.

South Australian business delegation to China

Senior representatives from the South Australian wine industry took part in a business delegation last week, led by Premier Peter Malinauskas.

Treasury Wine Estates CEO Tim Ford was among the business leaders who participated. He told The Weekend Australian he “remained optimistic about a potential resolution to tariffs on Australian wine.”

“The delegation was really valuable and we saw how business and government are keen to keep exploring opportunities in China and building local relationships.

“We have strong relationships with our Chinese customers and we know they love our Penfolds wines.”

Malinauskas said: “Travelling with the CEOs of listed companies and industry associations means this is a full-court press to demonstrate how determined we are.

“I was able to express some of the real-life stories of the impact tariffs are having on family businesses.

“We’ve seen a great step in the right direction with the easing of tariffs on barley, which means Chinese beer producers now have access to high-quality South Australian grain.

“We want the same for wine and seafood.”

Australian vineyards struggle to stay afloat amid wine glut

An end to the trade dispute would be welcome news for Australian winemakers, who are drowning in an oversupply of wine.

Australia has the equivalent of 859 Olympic swimming pools worth of wine in storage due to the current wine glut.

RaboResearch associate analyst Pia Piggott, the author of the Wine Quarterly Q3 2023 report, said last month that the oversupply equalled two billion litres of wine or over 2.8 billion bottles of wine.

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