THE peak body representing Australia’s “big three” wine-producing regions has tempered fears about the impact of China’s massive tariff whack on local producers.
The Inland Wine Regions Alliance – which represents growers in the Murray-Darling, Riverland and Riverina – says the value of wine exported to China is not matched by the total amount of Australia’s average annual wine production.
China accounts for 39 per cent of the total value of Australian wine exports. However, it only represents about 10 per cent of the total volume produced each year, the alliance says.
“Sensibly, the majority of commercial winemakers in Australia have maintained key relationships with other export markets and are not largely dependent on China,” alliance chair Jim Caddy said.
“Over the past 12 months, major export destinations and domestic consumption have seen increases in commercial wine sales, which have increased demand for Australian wine.”
Out of an average of 1.23 billion litres produced last year, the top four countries consuming domestic wine were Australia at 464 million litres (43 per cent), the United Kingdom at 257 million litres (24 per cent), United States 130 million litres (12.7 per cent) and then China at 123 million litres (11.5 per cent).
“Due to below-average wine grape crops of the last two years and sales volumes exceeding production levels, this indicates that current stock would be well below the 10-year average,” Mr Caddy said.
“Good sales volumes over the past 12 months by our commercial industry producers have left us in a much stronger position than during the last time we had problems.”
China imposed the new tariff, which ranges from 107 per cent to 212 per cent on bottles of two litres or less, late last month. It then imposed further temporary anti-subsidy tariffs of 6.3 per cent to 6.4 per cent on imported Australian wines, effective from last Friday.
Despite the Chinese trade concerns, commercial, unpackaged wine export prices remain 7 per cent above where they were in October 2019, and bottled commercial exports are only down 1 per cent.
This year, the Murray-Darling, Riverland and Riverina regions have collectively produced about 1.1 million tonnes of wine grapes. This accounts for about 73 per cent of Australia’s total wine grape crush.
The alliance’s call for calm on China came as Member for Murray Helen Dalton on Monday backed the Federal Government’s move to ask the World Trade Organisation to intervene on China’s bullying trade tactics.
“China’s behaviour is clearly unfair,” Mrs Dalton said.
“The impact of the China tariffs are devastating on Sunraysia’s wine producers, who have also been also crippled by NSW Government’s water mismanagement and low allocations,” Mrs Dalton said.
“Australia is in a difficult position as we are such a small country with limited bargaining power.”
