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Home / Business / The trade organization executive said that China’s tariffs on Australian wines essentially “close the market”

The trade organization executive said that China’s tariffs on Australian wines essentially “close the market”



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.”

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China’s Ministry of Commerce announced on Friday that its decision was made after preliminary evidence of dumping was discovered. Australian officials strongly protested this move, saying that China has been unable to provide evidence.
The alcohol war took place against the background of further deterioration in relations between the two countries. Australia this year called for an investigation into the origin of the coronavirus pandemic, disturbing China. Beijing later targeted Canberra’s trade by suspending some beef imports and imposing high tariffs on barley.
China levies up to 212% tariffs on Australian wine imports

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.”

On Monday, Australia’s leading winemaker Treasury Winery (RY) (TWE) announced a contingency plan. The company said that after discovering that its products will be subject to a tariff of 169.3%, it will begin to transfer its goods from China to other markets such as the United States, Europe and other Asian countries.

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%.

How the
According to data from the Australian Wine Association, a trade organization supported by the government, China is by far the largest importer of Australian wine. The organization stated that in the most recent fiscal year ending in September this year, mainland China alone accounted for 39% of Australia’s total wine exports.
Looking ahead, more “Australian winemakers will be forced to consider alternative markets for export sales,” the Australian Grape and Wine Company said in a statement.

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.”


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