China tariffs lifted on Aussie wine

China's punitive tariffs of up to 220% are expected to be dropped when China’s foreign minister, Wang Yi, arrives in Australia, but it is too late for many, with 2 years for wine in storage and vines already being pulled out of the ground.

The tariffs were part of China’s economic retaliation against Australia when it called for an independent investigation into how covid19 started. Wine was one of many of Australia's exports to be attacked, but the cost to the Australian wine industry has been so severe some wine regions are no longer economical.

Riverland, in Australia's hot interior and known for producing about a third of all Australian wines, is no longer economic with the oversupply and drop in grape prices. Tanks are already full with the latest government figures showing that Australia had more than 2 billion litres of wine in storage in mid-2023. That is equivalent to approximately two years’ worth of production. With nowhere to store the new harvest, growers have already started grubbing up vines.

Tony Townsend, told Bloomberg that he destroyed half of his 14ha vineyard last year, despite the vines being perfectly healthy. He estimated that he would have lost A$35,000 (£18,000) by simply harvesting them, as grape prices have collapsed.

But Tony is the tip of the iceberg millions of vines are being grubbed up and according to Reuters.

It feels like an era is ending, said Andrew Calabria, a third-generation vineyard owner and wine maker at Calabria Wines.

It's hard for growers to look out the back window and see a pile of dirt instead of vines that have been there as long as they've known.

Nearby, the remains of 1.1 million vines that once comprised one of Australia's largest vineyards were piled in heaps of gnarled and twisted wood as far as the eye could see.

To balance the market and lift prices, up to a quarter of the vines in areas such as Griffith must be pulled up, said Jeremy Cass, head of Riverina Winegrape Growers, a farmers' group there.
That would destroy more than 20 million vines across 12,000 hectares (30,000 acres), Reuters calculations based on Wine Australia data show, or about 8% of Australia's total area under vine.

A survey carried out by Riverland Wine in 2022, found that about a quarter of the region’s growers are planning on quitting in the next three years.

But when the tariffs are dropped it will not help Australian producers that much, China is no longer the wine nirvana it once was. In China, the imported wine market has dropped to a third of the size it was five years ago.