China's wine tariffs will have a 'devastating impact' on small Australian producers, trade group says

Bottles of wine imported from Australia are displayed for sale at a supermarket on November 27, 2020 in Hangzhou, Zhejiang Province of China.

Long Wei | VCG | Getty Images

SINGAPORE — Small exporters, grape growers and regional communities are going to feel the brunt of China’s decision to impose steep tariffs on Australian wine. That’s according to Tony Battaglene, chief executive of Australian Grape and Wine, the national association of grape and wine producers.

China’s commerce ministry on Friday announced preliminary anti-dumping duties ranging from 107% to 212% on Australian bottled wine imports, which went into effect the following day. That follows China’s anti-dumping probe into wine imports from Australia earlier this year.

“It’s going to have a devastating impact,” Battaglene said Monday on CNBC’s “Squawk Box Asia.” He explained that larger Australian wine exporters who have diversified portfolios would likely be able to cope with China’s decision even though they, too, would feel the pain.

“It’s grape growers, it’s regional communities and it’s small exporters that have very little ability to adjust. They’re the ones that are going to suffer,” Battaglene said.

Getting into other markets on short notice is not easy as it takes time, relationships and money to develop those markets, he added. “We just don’t have that. This is our peak time of export — 50% of our product goes into China in the last four months of the year. That’s closed. So this product has nowhere else to go.”

China market

‘Extreme disappointment’

Economists have said that any potential import restrictions from China on Australia’s mining exports would have a bigger impact as it takes up a large share of the export basket. A majority of Chinese iron ore imports, which are necessary in steel manufacturing, are sourced from Australia, according to Oxford Economics. It added that given the difficulty in finding alternative sources in the short term, China has yet to impose strict regulations on Australia’s iron ore exports.

The world’s second-largest economy remains Australia’s largest trading partner in goods and services and accounts for about 27.4% of Australia’s trade with the world, according to government data.

Earlier this month, both China and Australia became signatories to the world’s largest trading bloc — the Regional Comprehensive Economic Partnership, or RCEP.


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