Australian winemakers are predicting significant growth in wine sales to China following the removal of tariffs.
Under the new China free trade agreement (FTA) tariffs on Australian wine exports will be reduced to zero within four years.
The Australian Grape and Wine Authority (AGWA) says this will mean Australian wines will be more competitive in the growing Chinese wine market – particularly with Chile and New Zealand.
Those countries already have reduced or zero tariffs as a result of their own FTAs with China already in place.
Currently the tariff on Australian wine exports to China is 14 per cent for bottled and 20 per cent for bulk wine meaning the economic benefits to the wine sector as a result of this agreement are significant.
Last year Australia exported close to 37 million litres of wine to China, valued at A$210 million.
Growth in the last five years has been 8 per cent for volume and 17 per cent for value and Australia currently has the highest average-valued wine exports to China of the 10 largest bottled wine suppliers to that market.
AGWA’s Acting CEO Andreas Clark said: “China continues to hold enormous potential for Australian wine exports and after the recent contraction of the Chinese wine market and the impact of their government austerity measures, particularly on wine at higher price points, this is a very positive result for Australian wine.
“The wine culture in China is still developing but more and more Chinese consumers are starting to discover and appreciate wine. This FTA means it will be that much easier for us to ensure that as these consumers learn more about wine, it’s Australian wine they’re drinking.”
AGWA’s marketing arm Wine Australia has a dedicated office in Shanghai and executes an annual calendar of marketing activity in some of China’s largest cities and provinces.
Australian wine in China — quick facts:
- In 2013-14, almost 37 million litres of Australian wine were exported to China, valued at A$210 million
- The Chinese wine market represents 5.4 per cent of Australian wine exports valued at 11.8 per cent
- Growth in the last five years has been 8 per cent for volume and 17 per cent for value
- China is Australia’s third largest export market by value behind the United States and the United Kingdom
- China is Australia’s largest export market by value for wine at a price point of more than A$7.50 (wholesale ex-Australia)
- Australian wine exported to China currently has a 14 per cent tariff on bottled wine and a 20 per cent tariff on bulk wine.