Wine bottles at Pin Oak Beer & Wine bar in Melbourne
Australian grape growers have found it hard since China imposed tariffs on their goods. Image by James Ross/AAP PHOTOS
  • politics (general)

Rebuilding Chinese wine market may take a decade

Tess Ikonomou March 29, 2024

Australian wine producers expect it will take years before they recover the approximately $1.2 billion in sales to China, following Beijing’s removal of punishing tariffs on imports.

The Chinese Ministry of Commerce announced late on Thursday it was “no longer necessary” to impose sanctions on Australian wine imports.

They were slapped on by Beijing at the height of diplomatic tensions in 2020.

The decision removes one of the last major sanctions on $20 billion worth of Australian exports, although restrictions remain on lobster and beef.

Australian Grape & Wine chief executive Lee McLean said it could potentially take a decade for the market to recover to its pre-sanction levels, with less than $10 million worth of wine being exported annually to China.

“It will take years to get back to that $1.2 billion figure,” he said.

“Even if we get to half of what it was in a short period of time, that’s still a really significant export market for Australia.

“There’s no single market or collection of markets that can replace what we’ve lost in China over the last couple of years.”

Mr McLean said despite the “hugely positive” decision, his industry was still pushing for market diversification.

“That effort to grow opportunities in other markets is ongoing, and we’re going to need to keep doing that,” he said.

“We don’t want to get into a situation where we’re solely focused on China.”

A vineyard in South Australia.
 It could take years for Australia’s wine exports to China to fully recover. Image by Mick Tsikas/AAP PHOTOS 

Assistant Trade Minister Tim Ayres said about 20,000 Australians who work in the sector would benefit and could approach the year with greater confidence.

“It’s testament to the fact that the Albanese government’s careful, patient, effective and focused approach … has had some success,” he told reporters in Canberra.

Senator Ayres said the government was going to keep a focus on working to have sanctions lifted from rock lobster and beef at official and ministerial levels.

“I want to see fast progress on removing the remaining impediments, I’m confident that we’re making very good progress,” he said.

Echoing the wine sector, Senator Ayres said it was never a good idea to place all of your eggs in one basket.

“That’s why from the outset, the government’s approach here has been to urge a diversification message to Australian industry,” he said.

Jumping on the removal of tariffs, which came into effect from Friday, the NSW government will roll out events in partnership with the industry to help Australian companies re-enter the market.

NSW Trade Minister Anoulack Chanthivong said China was his state’s largest two-way trading partner.

“We understand that the market has changed, and conditions will be different this time around,” he said.

“Our focus will be to support NSW wineries to understand the new environment, re-enter the market and re-establish export pipelines.”