Lower import tariffs on wine increase exports
Sales of Australian wine in China and the Republic of Korea could increase significantly if import tariffs were phased out.
The removal of import tariffs by these two nations would lower the retail price of Australian wine in these markets, making it more competitive according to economic analysis released by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
ABARES executive director, Kim Ritman, said Australian wine exports to China and the Republic of Korea have grown over the past decade, however competition has increased from other imported wines, especially those from Chile and New Zealand.
“The strong growth in wine exports to China in recent years from both Chile and New Zealand reflect the market advantage granted by lower import tariffs on their wines,” Ritman said.
Economists estimate that the removal of China’s import tariff on Australian wine could result in a 12 percent fall in the Chinese retail price on Australian bottled wine and a 17 percent drop for bulk wine.
For the Republic of Korea, the fall in retail price would be around 13 percent for both bottled and bulk wine.
Ritman believes the report is evidence that a lower retail price would stimulate stronger demand for Australian wine, desirable results for wine exporters.
“The results of this analysis reaffirm the potential gains to the Australian wine industry of more liberalised trade,” Ritman said.
The full report is available here.