Chinese wine tariffs could cause thousands of job losses

Chinese wine tariffs could cause thousands of job losses in Australian wine industry

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OVERNIGHT IMPACT: Many wine exporters rely heavily on the Chinese market. Photo: Dion Georgopoulos

OVERNIGHT IMPACT: Many wine exporters rely heavily on the Chinese market. Photo: Dion Georgopoulos

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The wine industry is still coming to terms with the fallout from the effective closure of its biggest export market.

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THE proposed Chinese tariff on Australian wines could lead to thousands of job losses, as the industry still comes to terms with the potential closure of its biggest export market.

The tariffs range from 107pc to 212pc, effectively closing the Chinese market, following a Chinese investigation into dumping allegations in August.

China is Australia's number one wine export market, worth about $1.2 billion annually, with about 40 per cent of wine produced in Australia exported to the Chinese market, which favours premium reds.

Australian Grape and Wine chief executive Tony Battaglene said although the industry was yet to do a full analysis of the fallout, the tariffs could see the "potential loss of 5000 to 6000 jobs", along with downward pressure on wine and grape prices.

"The industry is pretty much in shock that the [Chinese] market is going to be close down for Australian wines," Mr Battaglene said.

"People started thinking about other markets when the investigation was launch in August, but not everyone will be able to do it.

"The big companies can do it if they've already got a foothold, but a lot of the smaller exporters rely solely on China."

Former Australian Winemaker of the Year and Stanthorpe-based vinologist Mike Hayes said the tariffs would have an "overnight" impact.

"This has huge ramifications for employment and the viability of companies," Mr Hayes said.

"Some places could lose 70 per cent of their staff."

Mr Hayes is also concerned Australian wine would flood the domestic market and "metaphorically bastardised" the industry.

"If we see high-quality wines selling for low prices in the domestic market, that's not affordable for producers," Mr Hayes said.

"Once those prices drop, it's hard to get them back up.

"The reason premium wines are expensive is because there is a hands-on approach, with meticulous care and attention to detail."

Mr Battaglene said the argument for dumping wine, a luxury good, into China didn't make any sense.

"It's our biggest and highest profit market - the dumping laws were designed for things like coffee paper and steel, not branded products like wine," he said.

"We have 10 days to dispute the decision. I don't think it will make a difference, but it will give us an opportunity to clearly lay out our arguments."

Mr Hayes also pointed out the recent trade deal China signed with the United States obligated the country to buy a large amount of American-made wines.

Trade Minister Simon Birmingham said he was yet speak to his Chinese counterpart, suggesting they were not willingly to communicate.

"Well, I can pick up the phone, but they're not choosing to do so," Mr Birmingham said.

Australia is preparing to take China to the World Trade Organisation over its barley tariffs, and the wine dispute may follow.

"It is certainly our instinct that we ought to use all avenues available to defend the integrity of Australian producers," Mr Birmingham said.

"We know that our grain growers like our winemakers aren't government subsidised. They don't dump their product on global markets below value."

The story Chinese wine tariffs could cause thousands of job losses first appeared on Farm Online.

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