Australian Grape and Wine chief executive Tony Battaglene said wineries “will clearly need to diversify more” after China “effectively closed the door to our bottled wine”.
READ MORE: Red Cliffs winery beats the Chinese tariff bottleneck
“The UK, which has just overtaken the United States as our second-biggest export market for wine, is picking up,” he told Sunraysia Daily this week.
“And while the US market is a tough one to crack, there are still opportunities there.”
Mr Battaglene virtually ruled out the prospect of wineries in Australia sending product in bulk containers to avoid the massive tariff slug.
“A lot of people will be looking at it as an option, but there are major risk factors with this,” he said.
“There are intellectual property issues, as well as quality-control and brand issues.
“Our high-value products could potentially be blended with other products when they arrive in China, so that’s why most wineries already package up wines before they are shipped to China.
“So, based on those reasons, China has effectively closed the door to our bottled wine.
“It’ll probably just be the likes of high-end premium bottled wine like Penfolds Grange that will still be exported.”
Latest data shows that Australia sends 39 per cent of its wine exports to China, with the UK and US the next best around the 15 per cent mark.
According to Wine Australia, the value of total exports to China (including Hong Kong and Macau) comprised $1.28 billion. Of that, packaged wine comprised $1.23 billion.
The data reveals that 750ml and 1.5-litre bottles – the primary target of Beijing’s new tariff – made up 94.5 per cent of exports to China.
The tariff – which came into effect on November 28 – follows the preliminary findings of a Chinese anti-dumping investigation into Australia’s wine exports, which found that dumping existed and caused Chinese winemakers “substantial harm”.
China has accused Australian producers of selling wine below the cost of production.
However, a Wine Australia spokeswoman strongly denied this was the case.
“We are confident that Australian wine is not being dumped in the market and that our growers and producers do not benefit from subsidies,” the spokeswoman said.
Mr Battaglene estimates that about 120 of the 2600 wineries around the nation are Chinese-owned.
“But really, we don’t know what the actual number are that are fully or part-owned,” he said.
The Wine Australia spokeswoman added: “There is no accurate data on how many China-owned wineries there are in Australia.
“The Foreign Investment Review Board tracks acquisitions of agricultural land where the cumulative value of a foreign person’s agricultural land holdings exceeds $15 million.
“(But) during COVID-19, the threshold has been reduced to zero (since March).”
