China’s Ministry of Commerce (MOFCOM) has announced it is officially ending punitive tariffs it placed on Australian wine imported into China.

The tariffs will lift on March 29, Good Friday.

The decision follows the Chinese Ministry of Commerce (MOFCOM) making an interim draft determination to abolish the tariffs earlier this month.

Tariffs of up to 218% were applied to Australian bottled wine imported into China more than three years ago. causing the collapse of the country’s $1.2 billion export trade.

“The Ministry of Commerce ruled that in view of the changes in the relevant wine market conditions in China, it is no longer necessary to impose anti-dumping duties and countervailing duties on imported relevant wines originating in Australia,” the Ministry of Commerce said in a statement.

Trade Minister Don Farrell and Prime Minister Anthony Albanese welcomed the decision and said it came at a critical time for the industry.

“The re-entry of Australian bottled wine into the Chinese market will benefit both Australian producers and Chinese consumers,” they said.

“We acknowledge and thank Australian grape growers and wine producers for their fortitude and support during a challenging period.”

Wine industry responds to news

Australia’s grape growers and winemakers have welcomed today’s final decision by MOFCOM to remove import duties on Australian wine products.

Australian Grape & Wine Chief Executive Lee McLean said: “This is a very important decision for the Australian wine industry.  It reflects the positive outcome of diplomatic efforts by the Albanese government to stabilise relations with China and underscores the importance of collaboration between government and industry.

“We acknowledge and thank Foreign Minister Penny Wong, Trade Minister Don Farrell and Agriculture Minister Murray Watt and their respective departments for their steadfast support of Australian grape growers and winemakers throughout the process.”

Australian Wine and Grape said that Australian wines offer Chinese consumers an unparalleled opportunity to explore new flavours and experiences. 

“The Australian wine sector has made a long-term commitment to building the market for Australian wine in China, with many wine companies having developed close relationships with importers, buyers and consumers of Australian wine over many years,” McLean said.

“We are working closely with the Australian Government and Wine Australia to ensure a coordinated approach is taken to re-entry and that the sector is well positioned to re-establish trade relationships.

“We look forward to seeing Australian wines back on Chinese dining tables and rejuvenating our relationship with customers and business partners in that market,” said Mr McLean.

“We will also, however, be maintaining our focus on diversifying our export footprint and growing demand here in Australia as well.”

Taylors Wines Manager Director Mitchell Taylor (above, with Trade Minister Don Farrell) said it was a “great Friday for Australian qinemakers and Chinese wine drinkers”. 

Accolade Wines CEO Robert Foye told The Australian: “While we do not anticipate a snapback to 2020 levels, we do see a sizeable opportunity for our business in China and we are excited about the long-term potential this market brings,” Mr Foye said.

“I was in China last week meeting with our key customers and distributors including at the Food & Drinks Fair in Chengdu and I can say there is genuine excitement about bringing Accolade’s portfolio of exceptional Australian wines back to the Chinese consumer.

“We know that Australian wine has a well-deserved reputation for quality in China, and that includes a number of our leading brands such as Hardys and Grant Burge, and we look forward to building on this now that the tariffs have been lifted.”

Treasury Wine Estates said it will begin to expand its premium and luxury Australian wine distribution in China
as well as increasing investment in local sales and marketing resources.

TWE CEO Tim Ford said the news marked a momentous milestone for the Australian wine industry as well as partners and consumers in China.  

“The removal of tariffs on Australian wine exports to China is terrific news and is cause for celebration across the Australian wine industry and with our partners and consumers in China,” Ford said.  

“It’s testament to the continued stabilising of relations between both countries by the respective governments and the ongoing partnerships maintained between Australian businesses and our Chinese counterparts.  

“Treasury Wine Estates has remained committed to China as demonstrated by our continued investment in the market through our local presence with more than 120 team members and partnerships contributing to Penfolds continued strong brand awareness in China.  

“This announcement signals the start of our ramp-up to re-establish our Australian luxury and premium wine distribution in China and it shouldn’t be too long before local Chinese consumers have more access to our great wines.

“It’s fantastic news for the Australian wine industry and opens the door for renewed opportunities for local winemakers and growers, particularly in regional Australia.”

Tyrrell’s Wines Managing Director Bruce Tyrrell said: “The loss of China over these last three years has caused a fair bit of damage to the industry and brought uncertainty. We don’t know what the Chinese market looks like after [the COVID-19 pandemic], but having access to it is a lot better than not.”

Challenges for Australian wine continue

While the tariffs may have ended, there are still many issues facing the Australian wine industry, including a grape glut and declining wine consumption globally.

Wine consumption has also slowed in China. Last year, China imported only $1.6bn of wine – down more than 60% from its peak of $4.28billion in 2018.

Wine Australia CEO Dr Martin Cole said prior to the imposition of the duties, mainland China was Australian wine’s most valuable export market and it is a market where opportunities remain for Australian wineries. 

“Mainland China remains an important market for the Australian wine sector,” he said.

“Over many years, Australian wine companies have developed close relationships with importers, buyers and consumers of Australian wine in China and these relationships remain important to our wine community. Pleasingly, we know that trade and consumer sentiment for Australian wine in China remains positive.

“However, the wine market in mainland China is different now to what it was at the end of 2020. Wineries seeking information to re-enter the market are encouraged to review the Export Market Guide, market insights and sign up for information about upcoming activities at wineaustralia.com.

“We will support the Australian wine sector to re-enter the market through a coordinated set of activities and advice on market requirements, while continuing our market diversification efforts in other markets.”

Wine glut issues

In August 2023 Rabobank predicted two tough years ahead for Australian vineyards and noted that not even early removal of Chinese anti-dumping tariffs would be enough to prevent the wine industry facing several years of oversupply.

Thousands of hectares of grapes have been ripped up in NSW alone over the past 18 months.

“We’re hearing the excavator has been booked out for six weeks. You can’t get one,“ Chairman of Riverina Winegrape Growers Bruno Brombal told the Australian Financial Review.

“China is not going to be the saviour overnight,” Brombal said. “We’ve got to replace the wines coming in from Europe and South America”.

Calabria Family Wines sales director Andrew Calabria said: “I believe it will be hard to dislodge the competitor set that has entered and taken [Australia’s] market share.”

However Jim Barry Wines Commercial manager Sam Barry said: “China is the hope for a lot of people.”

Millions of vines destroyed as grape glut deepens