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Sunday, July 14, 2024 | Digital Edition | Crossword & Sudoku

 Shattered wine industry waits on China

Prime Minister Anthony Albanese meets China’s President Xi Jinping.  Photo: Mick Tsikas/AAP 

“There’s been a muted cheer about the announcement that agreement had been reached to suspend the current World Trade Organization dispute while Beijing undertakes an ‘expedited review’ of duties on wine,” writes wine columnist RICHARD CALVER

THE Albanese government is renewing Australia’s relationship with China. This affects the wine industry, as does China’s power affect all of us. 

On the same day the media reported on the PM’s meeting with Chinese Premier Li Qiang in Beijing, a report from US-based research laboratory AidData showed that China is using financial power to increase its influence in the Pacific region. 

AidData notes that China provided some $US15.08 billion ($A23.43 billion) worth of development financing to Pacific Islands nations between 2000 and 2021. 

The amount of money reinforces that China matters on the world stage and our relationship with China is vital. China is Australia’s largest two-way trading partner in goods and services, accounting for nearly one third (32.2 per cent) of our trade with the world.

In the world of wine, there has been a muted cheer about the announcement in late October that agreement had been reached to suspend the current World Trade Organization dispute while Beijing undertakes an “expedited review” of duties on wine. The review is expected to take five months. 

The reason for the five-month period is not discernible from any official communication. But for the wine industry it’s a tantalising prospect because the attempts to find new markets for wine after the approximately $1 billion of exports to China dissolved in the face of up to 200 per cent tariffs, hasn’t been successful. 

As “Australian Wine and Grape” says, the closure of this market has had negative effects on all wine producers because of decreased demand: “The effective closure of the $1.2 billion China market has resulted in impacts being felt by the whole grape and wine sector, including those businesses that do not export.”

As the Prime Minister indicated when he broke the news of the setting aside of the dispute whilst China reviewed the duties imposed: “This is a very significant decision because, unlike some of the other products, the wine industry has indicated it was having difficulty finding other markets to fill the gap that was created by the breakdown in the trade with China.”

Tim Ford, CEO of Treasury Wine Estates (the company that owns, amongst others, the Penfolds brands), said: “It’s great to see an agreement for an expedited pathway forward to allow our Australian brands and wine to be sold in the Chinese market.

“There are only positives to come out of a favourable review for the Chinese consumer, customers and the wine category, for the Australian wine industry and for TWE.”

But there’s a heck of a lot of work to be done before Australia is again exporting a billion dollars’ worth of wine to China. Fingers crossed.

“We must walk consciously only part way toward our goal, and then leap in the dark to our success.” Thoreau

 

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Richard Calver

Richard Calver

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