How have Chinese tariffs affected Australia’s wine industry?
In retaliation for Australia’s call for a COVID-19 probe, China imposed a 169% tariff on Australian wine.
Australia’s wine exports to China plummeted by 99% from 2019 to 2023.
The tariffs have severely impacted premium Australian wine brands.
While other commodities found new markets, Australian winemakers have struggled.
Accolade Wines was forced to sell to a private-equity firm due to dwindling sales.
Treasury Wine Estates saw a 40% decline in shares from their peak in 2019.
The once flourishing relationship between Australian wine producers and the Chinese market has soured significantly due to steep tariffs, illuminating the vulnerability of premium consumer brands amid international trade disputes. In 2020, China introduced a 169% tariff on Australian wine, citing dumping allegations that coincided with Australia’s request for a global investigation into the origins of COVID-19.
This tariff imposition had cataclysmic repercussions, with Australian wine exports to China declining by an astonishing 99% by 2023 compared to 2019 levels. China was once the largest market for Australian wine, particularly favoring the more premium selections, and the impact of these restrictions has been profound. Australian wine exports, by value, experienced a steep 35% drop since 2019.
In an attempt to circumvent these tariffs, some Australian wine found its way to China via Hong Kong, where exports nearly tripled. However, such measures fell significantly short of compensating for the direct shipment shortfall.
The trade restrictions not only reveal the fragility of consumer goods like wine in the face of political tension but also emphasize the difficulty of redirecting products that rely heavily on brand recognition and marketing. In contrast, commodities such as barley and coal, which Australia successfully redirected to markets like Saudi Arabia, India, and Japan, experienced a less drastic downturn.
For Australian winemakers, the road to recovery has been fraught with challenges. Accolade Wines has faced considerable debt and the second-largest wine producer in the country recently transitioned to new ownership under Bain Capital. Treasury Wine Estates, the leading winemaker, has witnessed a 40% drop in shares since its 2019 zenith and continues to grapple with a 14% decline
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