Australian Grape and Wine chief executive Tony Battaglene said the huge tariffs announced by China had caught the industry by surprise and were “deeply shocking”.
He said about 1,400 small wineries, which are totally dependent on the Chinese market, were at risk of closure.
Under the Australia-China FTA, Australian wine could enter the Chinese market at zero tariff before yesterday’s tariffs of up to 212 percent were implemented.
“It’s very difficult for Australian winemakers to compete with these tariffs,” Battaglene said.
“The Chinese wine market is very competitive and they have products from France, Italy, Spain and South America.”
“We’ve achieved a good market share by having good relationships with Chinese importers and consumers, but with the added tariffs the prices will be hard to sustain.”
China is the largest buyer of Australian wine.
Australia exports about A$1.2 billion worth of wine to China each year, accounting for one-third of total wine exports.
Under China’s recently announced anti-dumping measures, wines under two liters will face significant tariffs, ranging from 107% to 212%.
Companies that cooperate with China’s anti-dumping investigation will be able to pay lower tariffs, ranging from 160 to 170 percent.
Battaglene said it was “impossible” to argue that Australia was harming China’s wine industry by dumping cheap wine.
“Right now I’m reading the 80-page preliminary investigation report and it’s full of holes,” he said.
“I really don’t think there’s any technical reason or rationale to accuse Australia of dumping wine on China.”
“If anything, it’s just that we’re selling it more expensive.”
Some of the wine producers anticipating China’s actions have already begun efforts to explore other markets.
Bruce Tyrrell, a wine producer in the Hunter Valley, exports 10 percent of his product to China. When China began an anti-dumping investigation against Australian wine just earlier this year, he turned his attention to other Asian markets.
“There was no other choice. It was obvious to me at the time that China was going to try to stop us from exporting to China in some form or another, and our sales in China were definitely going to go down,” Tyrrell said.
“I don’t think there will be a market (for Australian wine) in the short term (from China). Australia (wine) has lost its competitiveness in that market and we have to focus our efforts elsewhere.”
Tyrrell said his product would not be able to survive in this market when the 212 percent tariff is factored in.
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