How China is devastating Australia's billion-dollar wine industry

  • 2 months   ago
South Australian winemaker Jarrad White spent almost a decade building his business in China. Then, in a matter of months, it all fell apart.
It had nothing to do with the quality of White's wines at his vineyard in McLaren Vale, one of South Australia's premier winegrowing regions. Instead, it was the result of months of worsening diplomatic frictions between China and Australia.
White lived in Shanghai for several years, setting up a network of distributors to sell his Jarressa Estate wine to the booming Chinese market, where demand for foreign wines among the middle class was growing fast.
By mid-2020, more than 96% of Jaressa Estate's wines were being sold to consumers in China, up to seven million bottles a year. But in November, Beijing announced crippling tariffs on Australian wine as part of an "anti-dumping investigation" into whether those wines were being sold too cheaply in China. The government said the probe was prompted by complaints from Chinese wine producers.
White says he hasn't sold a single bottle since.
Currently, hundreds of thousands of bottles of Jarressa Estate wine are piled on pallets in a warehouse in Adelaide, the capital of South Australia, waiting for the tariffs to be lifted.
"It's hurting us dramatically. We had a lot of supplies that needed to be paid for and all these orders that were planned to shift, so it's left us in an awkward situation," White said.
He isn't alone. Hundreds of Australian wine producers who invested heavily in China's wine boom are now facing an uncertain future.
The value of exports of wine to China dropped to almost zero in December, according to statistics from industry group Wine Australia. The total value of wine exported to China for all of 2020 dropped by 14% to about 1 billion Australian dollars ($790 million).
China maintains the measures are needed to stop cheap wine imports from depressing the local market. But the Australian wine industry believes it has more to do with worsening tensions between the two countries.
It isn't just wine. As relations between Canberra and Beijing spiral, many Australian exports, including beef and timber, started encountering obstacles entering the China market, and there's little optimism things will improve any time soon.

Source: CNN