TRANSCRIPT
In the latest sign of easing diplomatic tensions between China and Australia, Beijing has announced the removal of punishing tariffs on imports of Australian wine. The Chinese Ministry of Commerce announced on Thursday it was abolishing the tariffs - introduced in 2020 after a breakdown in relations under the Morrison government - to promote bilateral trade relations.
Foreign Affairs Minister Penny Wong says the federal government is working to get other restrictions eased.
"We are really pleased that since this government has been elected, we've seen almost 19 billion worth of exports have trade impediments removed based on 2019 figures. This is a decision that will benefit many Australians, wine growers, wine producers everywhere, and we thank them for their patience and their fortitude through this period of time. We know there's more to do and we are working hard on ensuring that lobster and red meat establishments also get access to the Chinese market."
The wine industry has been quick to welcome the decision.
Martin Cole, CEO of Wine Australia, applauded the work of Trade Minister Don Farrell, who negotiated a fast-tracked review of the tariffs after agreeing to suspend a dispute before the World Trade Organisation.
"The market in China is not the same as where we left, but having said that we know that the sentiment for our products over there is just tremendous so there's a lot of excitement already in the trade, and this move I think will just only emphasise that level of excitement."
Among those feeling that excitement were exporter Alex Xu of Royal Star Wine, which lost millions in trade and was forced to sell a vineyard in South Australia after the 2020 decision.
"Since yesterday, we do get so so many calls and also so many inquiries from the buyers and the suppliers, all the businesses, they all get so excited about this news."
Prior to the sanctions, companies like Royal Star structured their business around China's appetite for Australian wine.
At its peak, $1.2 billion worth of wine were exported each year to China, then Australia's biggest wine market.
That has dropped by nearly 99 per cent - to around $10 million - after the tariffs imposed additional costs of up to 220 per cent of the value of a bottle.
Australian Grape & Wine chief executive Lee McLean says it could potentially take a decade for the market to recover.
"Eventually, perhaps it can, but we're not expecting that it's going to come back to the 1.2 billion figure we saw a couple of years ago. That takes time. It's going to take some time to get back into the market and rebuild those connections with consumers, but there's no doubt that Chinese consumers have a real affinity for Australian wine, and we're looking forward to being able to provide that soon."
The 2020 decision pushed Australian wines into other parts of the world including markets in Europe, South East Asia, and America.
Meanwhile, Chilean and French wines have stepped in to the fill the gap in the market for China's strong demand for wine.
Mr McLean has welcomed the chance to reenter that market, but says Australian producers have learned a hard lesson.
He says he also wants to see government support for Australian wine in other international, and home-grown, markets.
"The other thing we're looking to government for, of course, is a continued effort around market diversification. We don't want to get into a situation where we're solely focused on China, we know we need to be balancing our export markets and looking for growth wherever we can, including here at home as well."
He says while supply is high, Australian producers are reluctant to flood the Chinese market.
"Right now we still have hundreds of millions of red wine, in tanks and barrels and bottles right across the country. We're going to need to work with government, with our members, with other industry associations to try and get through that. That's going to take time. It's going to take us having a really hard look at our supply, our supply side, and whether we can match that demand for Australian wine in the longterm."
