News / Cheers – good news for Oz wine producers as China lifts import tarfiffs

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A lifting of import tax on Australian wine into China could help relieve a struggling industry down under – but a huge increase in consumption is needed to make up for lost time.  

Last week, the Chinese government abolished the heavy tariffs applied to Australian wine imports, introduced in 2021 to target “anti-competitive behaviour”. 

Trade Data Service (TDS) reported the tariffs increased the cost of the wine by around 175%. Previously, about 40% of Australian wine exports, by value, went to China, with Australia accounting for about 40% of the value of all Chinese wine imports.  

The Australian wine industry has also been struggling with global oversupply, and Chinese consumers will now need to increase their wine consumption for producers to regain their lost market share.  

However, this might not be as simple as it sounds: TDS noted that global wine exports to China had been declining even before the tariff was introduced, hitting a peak in 2017/2018.  

It said: “China in 2023 imported only about a third of 2017 levels. The loss of Australian wine has not been replaced with wine from other origins, and also needs to be viewed in the context of overall declining imports.” 

TDS data showed that, at its peak in 2018, Australian wine exports to China were valued at US$2.1bn, or a 35% share in export value. By 2023, this had decreased to $1.4bn, just 1% of export value. By volume, in 2022 China only consumed 46% of the 2017 levels.  

Five countries accounted for about 90% of Chinese wine imports prior to 2020 – France, Australia, Chile, Spain and Italy. However, its competitors saw no real benefit from the reduction of Australia’s wine into China, and are all exporting less there than in 2019. 

This reflects a a moderate downward trend in global wine consumption since 2007. TDS reported that the only large market which has shown a steady growth trajectory has been the US.  

So, while the Chinese government lifting tariffs is good news for Australian wine exporters, Chinese consumers now need to do their bit TDS said: “Simply said, for Australian wine to regain its previous market position, Chinese consumers need to drink more wine.”