TRADE tariffs of up to 200 per cent on Australian wine being imported into China are expected to “significantly impact” the Riverland, according to both a local MP and the chair of a regional industry body.
The Chinese Government last week introduced tariffs – in response to its own unsubstantiated claims of wine dumping in the country – of between 107 per cent and 212 per cent on the importation of Australian wines.
Member for Chaffey Tim Whetstone said exporters were already experiencing challenges trying to transport local wine into China.
“It’s taken a little while to analyse the situation, but I’ve got real concerns now about what it means for the Riverland,” Mr Whetstone said.
“As I understand it there has been little to no trade with China since November 1, and what it now means is there’s a number of containers that have come back with the wine in it, that have had to be decanted back into the winery.
“This is going to have significant impact on wine sales into China, and it will also have an impact on grape prices to our grape growers.”
Mr Whetstone said trade practices used by exporters of South Australian wine had been wrongly labelled as dumping.
“It is now being seen – through no fault of Australian wine producers – as though we are dumping product into China, but at the end of the day this is political,” he said.
“China has a list of demands we potentially can’t help.
“I’m very worried. We’ve seen some buoyant prices and a rosy picture painted for our wine industry and now this is going to have a significant impact.”
South Australian wine exports to China – which imports the largest amount of premium Australian wine globally – are estimated to be worth around $700 million each year.
Riverland Wine chair Chris Byrne predicted the tariffs would have an immediate impact on prices paid to local producers for wine and grapes.
“Sales in all markets will be disrupted as buyers and sellers adjust forecasts,” he said
“As wine producers scramble to retrieve stocks already in transit and look to other markets it is becoming clearer what the ripple effects will be.
“There will be a surplus of Australian wine (and) this will trigger a push-down on prices for wine and grapes in the short-term.”
Mr Whetstone said the development of other international markets had suffered due to a focus on trade with China, and that sourcing other markets was vital.
“We cannot put all our eggs in one basket,” Mr Whetstone said.
“We have to diversify our market share. We’ve been seduced by China, good returns and high-volume sales, but other global markets have missed out.
“We now need to understand that we’ve got to look at ways to diversify our markets, but that won’t happen overnight.”
Mr Whetstone said long-term co-operation would be required between Riverland grape growers and winemakers.
“I would urge growers to sure up their supply agreements,” he said.
“We saw the pressures of the water market last season (and) this season it will be the industry pressures we see.
“I would urge wineries and wine grape buyers to look at a longer strategic agreement with growers. We’ve seen some pressure this year, so try to spread that pain out over the next few years.”