Treasury Wine Estates has announced that it plans to resume the distribution of some of its products in China, after the Chinese Ministry of Commerce said it would remove tariffs on Australian wine imports from March 29.
Treasury Wine will use partnerships with customers in China to distribute its Penfolds entry-level Australian origin portfolio as well as its Premium Brands Australian-sourced priority portfolio, it said.
Brand Investment
In addition to resuming distribution, it plans to expand sales and increase its marketing resources and brand investment in China. It said, however, the incremental earnings from the Chinese sales of its wines would be minimal through the remainder of fiscal 2024.
Sales diminished after tariffs of up to 218.4% were first imposed in March 2021 for a period of five years along with other trade barriers on Australian commodities when ties soured after Canberra called for an investigation into the origins of COVID-19.
Ties between Canberra and Beijing have improved significantly since last year, leading to China steadily lifting trade barriers on Australian goods including barley and coal.
Lifting Of Tariffs
China will lift anti-dumping and anti-subsidy tariffs on Australian wine from March 29, the Chinese commerce ministry said on Thursday, ending three years of punitive levies and offering long-awaited relief to Australian wine producers.
The tariffs, of up to 218.4%, were first imposed in March 2021 for a period of five years along with a host of other trade barriers on Australian commodities when ties soured after Canberra called for a probe into the origins of COVID-19.
Ties have improved significantly since last year, leading China to steadily lifting trade hurdles on Australian goods, including barley and coal.
"Given the situation in China's wine market has changed, the anti-dumping and anti-subsidy tariff imposed on wine imported from Australia is no longer necessary," the commerce ministry said in a statement.
Previously, Australian wines imported into China were subject to zero tariffs after the signing of a free trade agreement in 2015, giving them a 14% tariff advantage over many other wine-producing nations.
"We welcome this outcome, which comes at a critical time for the Australian wine industry," the Australian government said in a statement.
