Australian wine industry awaits relief as billions of litres unsold: Report

Billions of litres of wine is sloshing around in Australia as there's almost no way to sell it quickly, reported Financial Times. The winemakers of Australia are faced with a massive drop in wine exports as a result of the trade dispute with China.

China was the biggest importer of Australian wine but relations between the two countries soured during the Covid pandemic of the year 2020. This led China to impose punitive tariffs on Australian wine and this has resulted in Australian winemakers losing the Chinese market share to rivals from other countries.

The relations between the two countries are improving, but it's a long road ahead for the winemakers.

Australian Prime Minister Anthony Albanese raised the issue of punitive tariffs with Chinese Premier Li Qiang during the Asean meet in Jakarta earlier this month.

“It is in Australian wine producers’ interest to export wine, but it is also in China’s interest to receive it,” he said, as quoted by Financial Times.

However, Australian winemakers are not too optimistic about the situation, even if it improves.

“The market has effectively collapsed, which means there is a lot of bulk red wine floating around without a home. [The tariffs] have taken out the biggest market by the proverbial country mile,” said Alister Purbrick, chief executive of the family-owned Tahbilk winemaker in Nagambie in northern Victoria, as quoted by Financial Times.

The Australian wine industry has grown threefold since the 1990s. In the year 2022, there was about 1.3 billion litres production of wine. According to The Wine Australia trade body figures, the wine industry was generating A$ 40 billion ($25 billion) for the country's economy.

In the year before June 2023, wine exports fell 10 per cent to A$1.86 billion.

The winemakers are now praying for the full removal of tariffs by China. But even if they are removed, the winemakers fear that the industry will have to take a 'slow road' to recovery.

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