Crippling Chinese tariffs spark fears for South Burnett wine
WITH Australian wineries being the latest casualty of ongoing trade tensions between Australia and China, South Burnett wine producers are looking nervously toward what the future will hold for local businesses in the South Burnett.
A wine region through and though, the South Burnett is home to some of Australia’s - and the world’s - favourite boutique beverages. However, following recent allegations that Australian winemakers were dumping wine into the Chinese market to lower the price, the Chinese Ministry of Commerce imposed tariffs ranging between 107 and 212 per cent last week (November 27).
Clovely Estate founder and owner, Brett Heading, has been exporting his product to China since 2004, and is extremely concerned about what this means for Australian wine producers.
“We’re very worried about it, just as every Australian wine producer ought to be worried about it too,” Mr Heading said.
“What’s happening is that the very big players, who have been channelling wine to China, are going to have to channel it somewhere else, and if they don’t find export markets, the wine will end up being sold in Australia and it’s a very competitive wine market now.”
For this reason, Mr Heading said these tariffs will have severe ramifications for every wine producer, not just those who export to China, with smaller family owned businesses being hardest hit.
“It’s much easier for a very large company who has an export sales manager on a full-time basis to find the new markets. The Federal Government will always help you make introductions, but it is difficult for a family company,” he said.
Moffatdale Ridge Winery, owned by Jason and Susan Kinsella, have been exporting to China, Taiwan and Singapore for three years, and rely on the Chinese market for about 5 per cent of their income. Having sent their last shipment back in February, correspondence with DFAT has since estimated a 212 per cent tax for Moffatdale Ridge products in China.
Mr Kinsella said these tariffs are particularly hard hitting given the recent tourism slump suffered throughout Australia during COVID-19.
Particularly for those who rely heavily on tourism, having first been in lockdown, and with restaurants and bars unable to serve their products, many wineries around Queensland and Australia were already struggling financially.
“Those wineries are already hurting, and to now have a major portion of the Australian harvest no longer heading to China and looking for a new home, it can only have one effect - downward pressure on price,” he said.
Mayor Brett Otto said the South Burnett Regional Council is concerned that a ‘domestic oversupply’ will place a lot of pressure on pricing for our local producers, particularly piled upon the impacts of drought and COVID-19.
“There’s been a downturn in demand for wine, with the restaurants in the major centres of Sydney and Melbourne closing for such a long period of time. We were just starting to see the industry pick up again, and for this to come along, it’s a real kick in the guts for our local wine producers,” Mayor Otto said.
“It’s very challenging for the private sector and the government to deal with these situations. It may well be that the federal government will have to consider some support for the wine industry to get through this period until the dust settles on this matter.”
In addition to the added stress on local business and the potential loss of some of our wineries, Mayor Otto said this move by China could be a devastating blow to local tourism unless careful steps are taken to mitigate this result.
“I think that would be absolutely devastating for the region because they are such an important part of bringing tourists into the South Burnett. It could have a ripple effect right through the tourism industry that could affect more than just the wine industry,” he said.
“They’re going to have to work even harder now to make sure we are attracting as many people as we can, particularly from areas around Southern Queensland, so that we can try and hold up those tourist numbers and support those local wineries.”
Mayor Otto said this decision will also make the role of local tourism organisation Visit South Burnett even more pivotal in promoting the region and mitigating the impacts of these tariffs.
Agriculture and Fisheries Minister Mark Furner said “the Federal Government’s relationship with China is having a big impact – particularly on our wine industry.”
“China is our leading export market for Queensland wine,” he said.
“Queensland producers exported around $1.4 million worth of wine to China in the year to September 2020.”
Mr Furner said the Palaszczuk Government has made grants available to help Australian producers adapt to changing availability of export markets throughout the COVID-19 pandemic, and will continue to “support producers to reach and expand to new markets” in coming months.
With their products no longer competitive in China, both Mr Heading and Mr Kinsella are looking for other markets to expand their businesses, with opportunities opening up in the UK and India.
“There’s a shift within the Australian and Queensland Government to assist exporters to look at other markets,” Mr Kinsella said.
“Sometimes it’s good to have a reset, and as an importer and an exporter, we’ve become far too reliant on a single market,”
Likewise, both have faith the South Burnett community will come through, with domestic tourism bouncing back rapidly after restrictions eased in Queensland.
“It’s so important for the district that there to be a collaboration between all the wineries, and the locals can support us by encouraging their friends to come up and sample the local product, and so far the traffic from Brisbane, the Sunshine Coast and Hervey Bay has been very good,” Mr Heading said.
“The fact that people are wanting to travel within Queensland has been really good.”