Wine maker hit with 212% China tariff
Southeast wine lovers may be the beneficiaries of a nasty trade war with China after a Queensland boutique wine maker was slapped with a whopping 212 per cent on his wine exports to that country.
Sirromet Wines general manager Rod Hill said the tariff would have a major impact on the price of all Australian wines going to China.
Mr Hill said he was unsure how the China tariffs would affect local sales of his wine for Christmas but did not rule out a nice yuletide surprise with some quality boutique wines at cheaper prices.
"It's not really going to have an impact on the local market - but if you get into a situation where there is an over supply of wine in the Australian market and we can't find a home for it in an export market, there will be downward pressure on prices so local consumers may actually benefit."
China last week decided to add the tariffs, which range from 107.1 per cent to 212.1 per cent, after it held an investigation into claims Australian wine producers were dumping wine at bargain basement prices on the world market.
The Australian government rejected the claims and said there was no basis or any evidence for them before today asking China to delete and remove a social media post about Australian Defence Force personnel.
"These new tariffs are a significant impact and for us it means we will have no choice but to pass on those extra costs to our customers in China," Mr Hill said.
"Then it will become a situation as to whether our wines can continue to compete in the marketplace if there is an uneven playing field.
"This is nothing new. It is just that it is a significant change that happened unexpectedly forcing wine producers in Australia to react quickly.
"It does eliminate the uncertainty of what the tariffs will be now the investigation in wine dumping is completed."
He said his China customers had delayed ordering while China was setting the tariffs, which will be applied at different rates to different producers depending on how China decides to classify the supplier.
Large wine producers have been hit with tariffs starting at 107 per cent with the rest of the Australian producers taxed at the highest 212 per cent rate.
China tariffs on wine exports existed before the world Free Trade Agreement was announced in 2015, heralding reductions down to zero per cent in 2019, when wine exporters were only left paying a 17 per cent value added tax.
Federal Trade Minister Simon Birmingham announced on Sunday he would address the organisation about China's treatment of Australian barley and coal delays at Chinese ports but at this stage, wine will not be part of any immediate complaint to the World Trade.
Mr Hill said Sirromet Wines, based at Mt Cotton, was in a strong position to ride out the hefty tariff with only 25 per cent of its wine exported, amounting to about 50,000 bottles a year.
But he said Sirromet also traded with Japan, Vietnam and South Korea.
Originally published as Wine maker hit with 212% China tariff: hint of Christmas bargains