Tony Battaglene, chief executive of the National Association of Australian Grape and Wine Association, said that Beijing’s decision last week to impose tariffs of up to 212% on Australian wine imports is jeopardizing trade with mainland China.
He added that Battaglene has worked with about 800 wine producers in Australia, who have “built their own business” around exporting to China, but there is no backup plan now.
“We were surprised, we were shocked,” Battaglene told CNN Business. “With the magnitude of these temporary tariffs, I mean essentially they will close the Chinese market for Australian bottled wine and high-end wine. We cannot compete at these levels.”
The tariffs imposed on wine came into effect on Saturday, forcing companies to scramble. According to Battaglene, after the announcement, some container ships destined for mainland China had to be diverted back to Australia.
He said: “Orders are cancelled and orders are suspended.” “No one wants…to bear additional import duties in order to obtain duties through customs. Essentially, the market will be closed to us.”
CEO Tim Ford said that some of the wines that TWE is considering redistributing have arrived at a port in Shanghai. “We will reassess [what to do with] this product. “He said on a conference call with analysts on Monday.
Ford added: “We are very disappointed to find that our business, the business of our partners and the Australian wine industry are in this position.” “Our attention is clearly focused on establishing business outside of China in the next period.”
The plan is not enough to reassure investors. TWE shares closed down 6.9% in Sydney on Monday. After the tariffs were announced on Friday, TWE shares fell 11.3%.
On Monday, Ford called on the Australian government to help companies find solutions.
He said: “It has yet to be resolved and will have a significant impact.” “Things may change, and we will deal with the changes, but we are dealing with the cards we currently know, if you want, there is no hope strategy. Because the hope strategy Not a very wise strategy.”