Alternative Investments

Australian wine exporters to have a profit boost from further China tariff reduction

Australian wine exporters

Australian wine exporters expect to receive a profit boost from this week, with a further reduction of tariffs to China now in effect.

China is now Australia’s biggest export market for wine, amounting to almost half a billion dollars.

Gemtree vineyards in McLaren Vale, near Adelaide, is confident its 2016 shiraz is a good match for the Chinese market.

The winery has a Chinese joint venture, and was one of the first to crack the market seven years ago.

Managing director, Mike Brown, said, “The initial growth was extraordinary, our business essentially trebled in the space of two years”.

Growth has since stabilised, but from this week exporting to China may be more profitable, with tariffs down to 5.6 per cent.

The free trade agreement has led to a staged tariff reduction from 14 per cent, hitting zero in 2019.

According to Tony Battaglene from the Winemakers’ Federation, “China’s now our biggest market, so this is a great chance to increase our profits”.

The Chinese export market grew 50 per cent last year and wine exporter Kandy Xu said her business had also doubled.

“[In the] beginning we exported about two containers per year, but now from last year we export 15 containers,” she said.

She said Chinese consumers had developed a wine drinking culture and Australia was now China’s biggest supplier.

“We’ve got around 24 per cent, 25 per cent of their market ahead of France. We’re now beating the old world at their game so that’s a really good outcome for us,” Mr Battaglene said.

According to winemakers, about 1.8 million tonnes of grapes were crushed for wine last year in Australia.

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The author Paul