China’s EU trade wrangling has Australian winemakers, exporters eyeing new opportunities

Speculation over possibility of Beijing imposing tariffs on European wine seen as an opening for Australian industry in China after three-year dry spell

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Australian wineries are looking for fresh opportunities to replenish their market share in China that was lost over the past three years. Photo: EPA-EFE

Published: 5:00pm, 10 Jun 2024

A potential tit-for-tat trade spat between China and the European Union could be Australian winemakers’ gain at the expense of EU wineries’ pain – a scenario that industry players from both sides are bracing for.

Australian winemakers and exporters are gradually seeing a partial comeback in the Chinese market, winning back some of the market share they lost over the last three years when bilateral ties soured. Meanwhile, some French winemakers are considering a “de-risking” strategy in case Beijing decides to impose punitive tariffs on imports from the EU, including wine, in the aftermath of Brussels’ possible provisional levy on Chinese electric vehicles.

France was the largest wine exporter to China last year with a total value of US$559.73 million, according to figures from Statista, while Italy and Spain were the third- and fourth-largest exporters with total values of US$117.22 million and US$66.99 million, respectively.

After taking the top spot in 2019, Australian wine was absent in the Chinese market from 2020-23, reflecting how diplomatic ties between the two sides soured after Canberra called for an investigation into the origin of the coronavirus. But those ties have improved markedly this year.

“Import tariffs on EU wines could create an opening for Australian wine in China [due to] reduced competition [with] higher prices,” said Jeson Chen, a wine exporter from Melbourne for 13 years.

But Chen had his doubts about “a full comeback” in the near term, owing to the fact that it takes time for Australian wineries to rebuild their “lost market share”, and as competition from other wine regions may also fill the gap left by the EU products.