Bustling pre-pandemic Food and Drinks Fair in Chengdu, China / Wine Australia
On March 26, 2021, after several months of restrictions, China’s government imposed tariffs of 116–218% on bottled Australian wine imports through 2026. This effectively shut the doors on what was Australia’s largest export market.
Now, the 2022 vintage is well under way. But for many in Australia, a cloud of uncertainty hangs over this harvest as the industry begins its second year effectively shut out from Chinese distribution.
The Australian wine industry relies heavily on exports, shipping 60% its production overseas. In less than a decade, China soared to the top of that export list, becoming Australia’s first AUD $1 billion (USD $733 million) a year wine market in 2019. Until recently, China accounted for 39% of all Australian wine exports.
By the end of 2021, a year after the first round of tariffs, Australian wine exports to mainland China had decreased by 97% in value. The global value of Aussie wine exports sank by 30%, according to Wine Australia’s latest Export Report.
“In 180 years, the Australian wine industry has never suffered such a setback,” says Warren Randall, proprietor of The Randall Wine Group, one of Australia’s largest private vineyard holders, and previously one of the nation’s most public proponents of Chinese investment.
A result of frayed relationships between the Chinese and Australian governments, the tariffs were imposed not just on wine but on other agricultural products as well, including Australian coal, beef, crayfish and timber.
“The Australian wine industry was an innocent bystander, a casualty in the crossfire of political coercion between China and Australia,” says Randall. “We did not heed their 14 grievances and they savaged seven Australian industries which were exporting 10% or AUD $20 billion of produce to China.”
“Twenty-three percent of the total annual value of the entire Australian wine crop was lost overnight,” he adds.
The impact on China
The tariffs don’t just affect Australian producers. Chinese importers and distributors have also been dealt a blow.
“We haven’t imported any Aussie wines since the anti-dumping policy was announced, as the new tariff has made it impossible to sell those wines at this cost,” says Baron Hong, general manager of Pran Wines, a Chinese importer and distributor dedicated to premium Australian wines.
“Australian wines used to be the most popular among Chinese wine drinkers, ranking number one in [the country] in terms of market share,” says Hong.