Story and photos by Dr. Michael Lim The Travelling Gourmet TM
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The debonair and indomitable Travelling Gourmet TM reveals the…
MONSTROUS impact vile china’s unjustified trade tariffs are having on Australian wine.
In January 2021, it was found that exports of Australian wine to China have FALLEN by a staggering 98% in only two months. Vile China’s unjustified trade tariffs of crushing new import taxes of up to 212% has hit the Australian Wine industry. The crushing new taxes were imposed at the end of November 2020 as part of an trumped up anti-dumping inquiry. Since then exports have nosedived by $158 million – down from $162 million in October to $4 million in December 2020. The hardest hit are red wine shipments.
Vile China’s total imports for the whole year were down almost 20% in value to US$2.83bn, while volumes dropped by nearly 29% to 471.3m litres compared with the previous year of 2020, according to Chinese research company ASKCI. This was largely in line with industry watchers’ forecasts, who had predicted that the global pandemic would knock at least 20% off any growth.
Greed and Avarice
The plain truth is that Australia’s greed for china’s market and lack of foresight of how a vile communist dictatorship operates are part of the reasons for this fiasco. Australia would do well to find other markets for their wines as well as their lobsters, barley, coal, wheat and other products which china has also attacked in a bitter trade war over the china virus. There are no new markets for Australian wines but Australia must focus on the markets in Europe, America, South Korea and South East Asia. Free Trade Agreements like RCEP which Australia foolishly joined count for nothing when you are dealing with a vile communist dictatorship who does not follow agreements. Not for nothing is Greed and Avarice one of the seven deadly sins.
However, the drop in imports was perhaps less significant as many wine importers had started stockpiling Australian wines ahead of the imposition of new tariffs. Before the imposition of the taxes by the Chinese government late last year, there was a surge in imports as merchants stocked up on Australian wines.
Treasury Wine Estates of Australia plans a major overhaul of its business that includes the likely sale of low priority brands and other assets, aiming to gain at least A$300 million ($230 million) as it reels from the impact of steep Chinese tariffs on Australian wine. One of their labels is the famous Wolf Blass.
The restructuring was unveiled on 17 February 2021, as the world’s largest listed winemaker reported a 43% slump in first-half net profit to A$120.9 million ($94 million) and cut its interim dividend by a quarter to 15 Australian cents per share.
At the same time the china’s domestic wine production declined for the fifth consecutive year, down by 6.1%to 413m litres last year. Chinese winemakers claim that the decline is a result of cuts from big volume producers such as Changyu and the state owned Great Wall winery.
Meanwhile, South Africa is making the same mistakes that Australia made. Beijing has hit a range of Australian goods with punitive duties, deliberately created new layers of red tape and banned some Australian imports outright, giving South African suppliers of anything from coal to beef to copper a boost. Blinded by greed, South African wine exports to china have jumped 50% over the past three months, according to the Wines of South Africa trade body. Hopes are high for even more sales once Australian stocks are polished off during China’s Lunar New Year holiday. In time to come South Africa may well regret their foray into china’s market in the same way that Australia fells today.
Nederburg South African Wines
The Travelling Gourmet TM says. “Keep calm and drink Australian wines!”