Blog Post: The Potential Revival of Australian Wine in the Chinese Market
In a surprising turn of events, the news of a review on punitive tariffs imposed by China on Australian wine in 2021 has sparked hope among industry players. Campbell Thompson, the CEO of The Wine Republic, a leading wine importer and distributor based in Beijing, expressed his excitement at the possibility of the tariffs being removed. With over a decade of experience in the Chinese market, Thompson believes that this presents a great opportunity for Australian wine.
The introduction of a staggering 218% tax on Australian wine by China earlier this year had a devastating impact on the industry, leading to the collapse of a trade that was previously valued at $1.2 billion annually. Treasury Wine Estates, the maker of Penfold’s wines, reported a staggering 97% decline in its China business due to the tariffs. Prior to the strained relationship between Australia and China, Australian wines enjoyed a significant advantage with zero tariffs, thanks to a free trade agreement signed in 2015.
However, the call by Australia for an investigation into the origins of COVID-19 in 2020 changed the dynamics of the trade. With the introduction of tariffs, many Australian wineries were left in a state of uncertainty. Nevertheless, there seems to be some light at the end of the tunnel. Last month, China and Australia announced that they had reached a consensus to settle the WTO wine dispute, and the anti-dumping tariffs, which were slated to last until 2026, will now be reviewed. This positive development comes just before Australian Prime Minister Anthony Albanese’s visit to China this month.
Campbell Thompson has wasted no time in reaching out to his previous partners, the over 10 Australian wineries he collaborated with before 2021, and even some new players in the industry. With the expectation that the tariffs will soon be removed, Thompson believes this might open the doors for Australian wine to re-enter the Chinese market by early next year. However, he remains cautiously optimistic, acknowledging that the recovery may not happen overnight. While Thompson acknowledges the challenges ahead, he is confident that customers still recognize and appreciate the quality of Australian wines, which will ultimately help facilitate their re-engagement with the market.
Layla Wang, co-owner of Trio Wine Bar in Beijing, shares Thompson’s optimism. She believes that the Chinese market’s perception of Australian wine has remained unchanged during its absence. Wang runs a wine bar that boasts an extensive collection from all over the world. She highlights how the market has become more diverse, with consumers seeking out new and unique wine experiences, leading to the increased popularity of Chinese wines, as well as biodynamic and natural options. For Wang, the potential revival of Australian wine signifies a wider range of choices for her customers, many of whom will be eager to rediscover Australian wines after years of limited access.
The review of punitive tariffs on Australian wine by China is undoubtedly a positive development for the industry. While the road to recovery may be slow and challenging, the potential return of Australian wine to the Chinese market brings hope and excitement. Both industry professionals and consumers are eagerly anticipating the removal of tariffs, which will pave the way for a revival of the once-thriving trade relationship between the two countries. Let us raise a glass to the possibility of Australian wine making a triumphant comeback in the Chinese market.
*Reporting by Casey Hall; Editing by Simon Cameron-Moore*