Crippling tariffs imposed by China on Australia’s wine industry in 2020 look set to be removed, with China releasing an interim draft determination to do so overnight. The industry is cautiously hopeful, with a final decision expected in the coming weeks.
The first sign the tariffs were under consideration was in October when almost three years after China imposed tariffs of up to 212 per cent on Australian wine, Prime Minister Anthony Albanese says the two countries have agreed to a review that is expected to be completed in five months. Prior to the tariffs being imposed, Australia’s wine export to China was worth $1.2 billion.
Albanese also said Australia would suspend its action against China before the World Trade Organisation while the review is underway.
The provisional tariffs imposed by China in December 2020 on Australian wine imports imposed charges from 107.1 to 212 per cent imposed on wine in containers of two litres or less.
China announced the tariffs at a time Chinese produced wine had fallen from 75 per cent market share in 2015 to 50 per cent in 2019. Meanwhile, Australian wine exports to China grew from $268 million in 2015-16 to $1.75 billion in 2018-19.
On the announcement the tariffs may be lifted, Treasury Wine Estates (TWE) said the re-establishment of its Australian country of origin portfolio in China would have minimal impact on its EBITS for FY24.
After the tariffs came in, TWE reported a 43 per cent drop in its NPAT to $120.9 million.
The impact saw TWE refocus its business onto other Asian countries and the US, as well as a company restructure.
