China’s Ministry of Commerce has proposed lifting punitive tariffs imposed on the Australian wine, signalling an end of a three-year trade freeze that has upended Australia AU$1.2 billion annaul wine exports.

This development follows the ministry’s promise about two weeks prior for an “objective, fair, and impartial decision” after reviewing the tariffs, as we have reported.

Although the ministry has yet to publicly announce the recommendation or specify an effective date, the recommendaiton from the ministry will surely lift Australian wine industry, which has been severly battered by oversupply and declining global sales over the last three years.

“The interim recommendation to remove tariffs on Australian wine is a welcome development,” Australia’s Trade Minister Don Farrell said in a statement on Tuesday. “It vindicates the government’s preferred approach of resolving trade issues through dialogue rather than disputation,” he added.

Speaking to Vino Joy News just ahead of the news announcement, the optimsim for the positive decision was palpalble with William Dong, CEO of DMG Fine Wines, which owns Handpicked Wines and House of Arras.

“As the CEO of DMG Fine Wines, I can confidently say that we are eagerly anticipating the decision regarding the potential lifting of punitive tariffs on Australian wine by China. A positive outcome would undoubtedly be welcomed by our entire team and the wider Australian wine industry. It would not only signify the restoration of a vital market for Australian wine producers but also pave the way for renewed opportunities and growth.”

In anticpation of the lift, the company has shipped its wine stocks to tax-free Hong Kong ready for the mainland market. “We currently have 10 containers of wine in Hong Kong awaiting the reopening of the Chinese market,” Dong revealed.

“We currently have 10 containers of wine in Hong Kong awaiting the reopening of the Chinese market.”

William Dong, CEO of DMG Fine Wines

Speaking to Vino Joy News on the fair ground of Prowein Dusseldorf, Wakefield Wines owned by Australian wine group Taylors Family Wines, is also amping for a return to China. The winery has already hired staff in Guangzhou of South China in preparation for the re-opening.

Treasury Wine Estates, the biggesst Australian wine exporter to China prior to the tariffs, had previously revealed that the wine giant is “prepared and well placed” to resume shipping of its wines including Penfolds Bin and Icon series to the Chinese market upon a positive outcome.

However, some remain cautious about the return and are apprehensive with post-pandemic Chinese market’s buying power especially amid economic downturn and consumption depression.

Bunnamaggo Estate Wines in New South Wales was exporting about 25-30% of its wines to China prior to the pandemic, but Michael Hatcher, Wine Operations Manager at the estate, has no illusions that its exports will jump to pre-tariff levels.

“No, no, I don’t think so”, said Hatcher, when asked about his expecation on China re-opening at Prowein Dusseldorf. “Our major customers are still there, so they’re still keen to do business, but with the downturn in the economy there, I don’t think they’ll be as strong…They’re not ready to buy yet,” he paused before adding, “They will buy, but they certainly won’t be buying at the levels.”