SAWIA welcomes China free trade deal

Tuesday, Dec 2, 2014

Tariffs on Australian wine exports to China will be reduced to zero

within four years under the new Free Trade Agreement (FTA) that has been agreed with China.

With the signing of a Declaration of Intent, both Australia and China will now take the necessary steps towards bringing the Agreement into force.

Currently the tariff on Australian wine exports to China is 14 per cent for bottled wine and 20 per cent for bulk wine. The removal of the tariff will allow Australia to be more competitive in the growing Chinese wine market, particularly with Chile and New Zealand who already have reduced or zero tariffs as a result of their own FTAs with China.

China still has enormous potential for Australian wine exports. Last year Australia exported close to 37 million litres of wine to China, valued at $210 million. Growth across the past five years has been eight per cent for volume and 17 per cent for value, and Australia currently has the highest average-valued wine exports to China of the 10 largest bottled wine suppliers to that market.

While we still need to see the finer details of the China trade deal, reducing the import tariff opens the door for market growth. It will directly benefit commercial and bulk wine and present an opportunity for higher priced wine to re-engage with wine buyers and retailers. The recent trade deals with China, Japan and South Korea, combined with a weakening of the Australian dollar, offer good reason for renewed optimism in our industry.