Australian winemaker raises glass ahead of UK free trade deal

One of Australia’s largest wine exporters said a free trade deal with the UK would lower the cost of better wine for UK drinkers while helping to fill the void left by the collapse of exports to China.

Australia’s wine industry struggled with high tariffs of up to 218 percent imposed by Beijing last year as diplomatic and economic tensions between the two countries escalated.

Limestone Coast Winery, one of Australia’s top 20 wine exporters by value, saw its profit margin “disappear overnight” as China accounted for around 50 percent of its revenue and most of its cash flow. Treasury.

“It was ‘Black Friday’ when the prices went down,” said Richie Vandenberg, managing director of the South Australian producer. Overall, Australian wine exports to China fell 96% year-on-year between December and March, according to data from Wine Australia, a government agency.

But the prospect of a tariff-free and quota-free trade deal between the UK and Australia has heightened hopes that the UK will fill the void left by China.

Vines in a wine estate in the Yarra Valley, Victoria. The introduction of tariffs by Beijing last November brought down imports of Australian wines © James Bugg / Bloomberg

Wine is Australia’s biggest export to the UK, ahead of lamb, but it’s subject to a tariff that adds around 10 to 12 pence per bottle of wine, according to Wine Australia.

Limestone Coast Winery, which is the originator of The Hidden Sea label but also supplies supermarket own-brand wines, said this made the country “by far” the least profitable market for its products, but that a duty-free deal would allow it to compete.

Justin Moran, co-founder of the company, said: “Chilean wine has a 13 percent tariff advantage over us in the UK. If Australia can get a good deal with the UK it would have a huge advantage for Australian wine and benefit the UK consumer. “

A deal between the UK and Australia has been mired in controversy, with farmers warning tariff-free beef and lamb imported from Down Under could have a devastating effect on UK agriculture . The Australian Agricultural Company, the country’s largest beef exporter, said this week that a tariff-free deal could boost sales to the UK tenfold.

graph showing sharp drop in Australian wine exports to mainland China

Vandenberg, speaking of the Coonawarra region where the group sources the fruit, argued that the UK and Australia are natural trading partners. “I have empathy for Scottish farmers, but it would be a shame if this ended a free trade agreement between the UK and Australia,” he said. “We are an important business partner. The British consumer will win. “

Not all Australian winegrowers are banking on the “old world” to offset the impact of Chinese tariffs. Accolade Wines, owner of the Hardys and Echo Falls brands, said it would ship wine from Chile and elsewhere to China to circumvent the tax.

Australian wine exports to the UK increased by a third to $ 461 million between December and March, while the volume shipped increased by a fifth to 264 million liters. The average value received for Australian wine in the UK rose 10 percent to $ 1.75 per liter, the highest level in a decade.

Richie Vandenberg playing Australian football in 2007
Richie Vandenberg during his career as an Australian football player © Quinn Rooney / Getty

Limestone Coast Winery, which has sold 100 million liters of wine since its inception in 1998, hopes to capitalize on savings from the potential lifting of UK tariffs on promoting the The Hidden Sea brand – which uses the profits to remove the plastic of Indonesian seas.

Moran has accused some UK retailers and the government of “laundering” single-use plastic as a huge amount of waste is shipped to Turkey and Southeast Asia. “They are absolute latecomers, but they still hit their chests about removing the plastic,” he said.

Vandenberg is an Australian football icon who played for the Hawthorn club 20 years ago and was a central figure in the infamous ‘line in the sand’ fight.

“People know me from AFL, which is a tough and tough sport – but here I take the plastic out of the ocean,” he said, adding that people don’t need to. be diehard “environmentalists” in solving problems such as plastic pollution.

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