Tariff drop for wine and spirits exports to China

Australian wine and spirits exporters are enjoying a profit boost this week as export tariffs to China fall.

Tariffs paid on Australian alcoholic beverages heading to China have been reducing in stages since 2015, when the Australia-China Free Trade Agreement came into effect.

In the latest reductions, which came into effect on January 1, tariffs on wine reduced to 5.6%, while tariffs on spirits reduced to 4%. The tariffs will continue to reduce in stages until they hit 0% in 2019. 

It's hoped the tariff cuts will continue to increase the popularity of Australia's premium wines and spirits ahead of Europe and the United States. 

"China's now our biggest market, so this is a great chance to increase our profits," Tony Battaglene from the Winemakers' Federation, told ABC News.
"We've got around 24%, 25% of their market ahead of France. We're now beating the old world at their game so that's a really good outcome for us."

China’s wine import market is growing dramatically, more than doubling in size since 2009-10 to be worth $3.2billion in 2015-16.

China is Australia’s second-largest export market for wine, worth $415 million in 2015-16. However, Australia competes with New Zealand and Chile, both of which have preferential wine access under their FTAs with China. China’s wine imports from Chile have increased almost seventeen-fold in size since its FTA with China entered into force in 2006.

However, exporters need to be aware that tariff reduction is not automatic - they need an FTA-specific Certificate of Origin or Declaration of Origin for shipments.

A copy of the ChAFTA Certificate of Origin and Declaration of Origin can be found as Annex 3A and 3B to Chapter 3 of the ChAFTA treaty on the Department of Foreign Affairs and Trade website.

Businesses should contact the Australian issuing authorities: the Australian Chamber of Commerce and Industry (ACCI), the Australian Industry Group (AiG) and (for wine and wine products only) the Australian Grape and Wine Authority. The Australian Grape and Wine Authority is unique to ChAFTA.

For more details, click here. 

Pictured: Mitchell Taylor spreads the Taylors Wine joy in Shanghai.