Fresh hopes China wine tariffs will be removed ‘shortly’

Tim Ayres, Australia's Assistant Trade Minister, has stated that he expects China’s ongoing review into current trade tariffs to end “shortly.” 

“There is an agreed approach that China is following where they are conducting a review very similar to the barley review," he said to Sky News.

We expect that to conclude shortly and expect that China will follow through in the same way they did on barley."

The statement follows a recent World Trade Organisation conference held in Abu Dhabi on Monday night, which Ayres attended alongside Trade Minister Don Farrell. The evening also saw Farrell host a private meeting with his Chinese Trade Minister counterpart Wang Wentao.

Ayres' comments also fall shortly ahead of the scheduled end of the tariff review, with Prime Minister Anthony Albonese recently announcing that the review would be finalised by the end of March at the latest.

Farrell went on record in an ABC TV interview on Wednesday, echoing Ayres’ stance. 

“I'm very confident that the discussions I had yesterday with Wang Wentao will result in them carrying through on what they undertook to do, which was to expedite the review of the tariffs, and that we'll get a result on that in a few weeks' time,” he said.

The Australian wine industry as a whole has been eagerly anticipating a return of trade with China, with both Australian Vintage Limited and Treasury Wine Estate optimistic of a return to the Chinese market in their latest half year results. 

TWE extended upon this by outlining its plan should tariffs be lifted. This plan is to re-establish its Australian country-of-origin portfolio in the Chinese market, which includes wines such as Penfolds Max’s, Koonunga Hill, and One. It will also reallocate a portion of Penfolds Bin and Icon tiers from other global markets and implement careful price increases to accommodate the anticipated changes to global demand.

Whilst AVG reported a strong quarter, TWE registered a significant drop in revenue, illuminating the currently desperate situation that Australia's wine industry has found itself in as a result of consistently low prices for red grapes, global oversupply, reduced consumption and the China trade tariffs. Last week, Riverland Wine met with state government to discuss the desperate need for financial assistance. This week, Salena Estate, one of Australia’s top 20 wine producers by volume, was forced into voluntary administration as a result of these building pressures. 

When asked by the ABC, Australian Trade Minister Don Farrell said he doesn’t consider the issue to be isolated to bulk wine producers.

“It's not just bulk wine producers.

“The loss of that largest trade market affected winemakers right around the country, including in my own town of the Clare Valley. I've seen, very tragically, local winemakers simply leave their grapes on the vines. So it's right across the country that winemakers are being affected by these bans and limitations.

“We have made it very clear that we want those bans lifted. We want them lifted in the time frame that we have discussed. If we don't get them lifted, then we will resume our World Trade Organisation dispute.”

The statements by Tim Ayres and Don Farrell follow on from similarly optimistic comments by Anthony Albonese last month. 

“I expect a resolution that will allow for wine to be back into China very soon,” said the Prime Minister.

“It’s in Australia’s interest, but it’s also in China’s interests. You know why? Because it’s bloody good wine, it’s a good product, Australia produces good products at good prices, and it is into the world’s interests to receive them.

“One of the things about McLaren and Barossa and Clare and the Adelaide Hills is it’s not just directly the jobs in the wine industry, they’re central to the South Australian tourism industry, they’re central in the multiplier factor that applies,” he said.