China further reduces tariffs on Australian wine

At a time when Australian wine exports to China are at an all time high, China has further reduced tariffs on Australian bottled and bulk wine, which is set to boost Australian wine exports to the country.

Officials from China and Australia signing the bilateral Free Trade Agreement in 2015

Starting from 1 January, 2018, import tariffs on Australian bottled wines to China have been cut from 5.6% to 2.8%, while tariffs on bulk wine have been reduced to 4%, based on the two countries’ Free Trade Agreement signed in December 2015. The agreement paved the way for a reduction in tariffs over a few years until 2019, when they will be completely scrapped.

In the first year after the FTA agreement, China’s demand for Australian wines surged. In September 2016, the country became Australia’s top export destination, outstripping the US as its top value market, according to Wine Australia.

Mainland China’s position as the number one destination for Australian wine exports by value was consolidated during the years 2016 and 2017. Exports grew by 44% in value to AU$607 million, according to figures released by the country’s trade organisation.

In China, Australian wine’s market share has been steadily growing. By the end of November in 2017, Australia had a 27.1% market share in terms of market value, following France’s 41.1%, based on figures just released by the China Association of Imports and Exports of Wine & Spirits.

In its most significant development, Australia, in the single month of October, surpassed France as China’s biggest source of imported bottled wine for the first time.

Although France reclaimed its position in November, Australia registered the highest value growth rate of 111.3% year-on-year. About 10.6 million litres of bottled Australian wine worth over US$80.67 million was shipped to China, slightly shy of France’s US$96.65 million, based on the Chinese trade organisation’s data.

Wine Australia’s pavilion at ProWine in Shanghai

Leading Australian wine companies such as Treasury Wine Estates was among the biggest beneficiaries of China’s Australian wine boom, which had contributed to its 55% profit rise in the 2017 financial year.

In addition to wine consumption, Chinese consumers’ growing interest in Australian wines spawned a profitable wine tourism industry to Australia and winery purchases.

Major tour operator AAT Kings reported a steep increase in tours from 38 in 2013 to more than 700 in 2016. In 2017, more than 1.33 million Chinese people visited Australia, spending AU$10 billion, reported The Daily Telegraph

Meanwhile, the Chinese are quick to buy up Australian vineyards. Changyu Pioneers, the oldest winery in China, spent AU$26 million for an 80% stake in Clare Valley-based winery Kilikanoon last month.

Wei Long, another Chinese winery based in Shandong province, also announced its plan to invest AU$120 million across the country in land and processing facilities, according to Australian Financial Review

The lure of Australian wine has also attracted the China’s leading wine merchants. Australian Vintage (AVL), the parent company of the McGuigan, Tempus Two and Nepenthe wine brands, attracted a lucrative financial investment from YesMyWine, China’s biggest online wine retailer, which will raise AU$16.5 million in capital.

To date, China has signed FTA agreements with a few wine producing countries including Australia, New Zealand, Chile and Georgia.

3 Responses to “China further reduces tariffs on Australian wine”

  1. Robert Indelicato says:

    And this compares to the US duty/tariff of 48.3%?

    • PK Chua says:

      what 48.3%? Thats crazy! is that the same for French wines too? No wonder French wines are expensive in China! Well….Australia and China always have some special relationships and wine is certainly one of them

  2. Chris says:

    Overall tax is 48, 2% for French an American wine. For Australia, the overall tax is not 2,8%. The article might be misleading as oevrall tax to pay for importer are compose of 3 taxes:

    ICD: import customs duty
    VAT: Value added tax
    CT: consumption tax

    Depending the product and country of origin those may changes. The FTA between Australia and China only affects the ICD so from 1st January, ICD for Australian still wine goes from 5,6% to 2,8%. In 2019 it will 0%. Rest hasn’t change. For French wine and i assumed US wine it’s 14%. VAT is 17% and CT is 10%. But it’s still a major commercial advantage in the more and more competitive market.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Sales Executive

Three Wine Men
Home-based but must be available to travel throughout the UK with frequent trips to London, GB

Senior Sales Operations Executive

Enotria&Coe
Park Royal, London, GB

Sales Administrator

Les Caves de Pyrène
Guildford, UK

On Trade & Corporate Accounts Manager

The Champagne Company
Birmingham, UK

Customer Service Assistant

The Champagne Company
Birmingham, UK

Key Account Manager - Distilling Sector - Scotland

Boortmalt
Scotland - call for exact details, UK

UK Brand Ambassador - Ableforth’s

ATOM Brands
Field-based, UK

Wine Sales Consultant

VSF GROUP
Valbonne, South of France, FR

UK Brand Ambassador

Mirabeau en Provence
London, UK

Sales Ambassador – London

Identity Drinks Brands
London, UK

Pink Rosé Festival

Cannes,France
7th Feb 2018

VinoVision Paris

Paris,France
12th Feb 2018

Vinisud

Montpellier,France
18th Feb 2018
Click to view more

The Global Pinot Noir Masters 2018

Deadline : 26th January 2018

Cabernet Sauvignon Masters 2018

Deadline : 23rd February 2018

Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

the drinks business is thrilled to announce the launch of The Global Sparkling Masters.

Click to view more