Hispanic producers see opportunity as China slaps tariffs on Australian wine
By Javier Triana
Beijing, Dec 11 (efe-epa).- The recent tariffs of up to 212.1 percent that China slapped on Australian wine, over alleged “dumping practices,” have opened a window of opportunity for competitors vying to capture the world’s largest wine market, with Chile and Spain touted to be leading the race.
The tariffs have dealt a severe blow to the market leader of imported wine in China in terms of value: as Australia had upstaged the traditional dominance of France in 2019 after being allowed to sell wines within Chinese territory with zero tariffs, a privilege also granted to Chilean and New Zealand-based producers.
However, due to a probe carried out since August at the request of the local wine industry, in November Beijing decided to impose the temporary tariffs on Australian produce – set to last until March for now – citing indications of exporters selling at a loss.
Although many sources of the sector from Spanish speaking countries told EFE that they viewed the measures with concern, there was a sense of anticipation over future developments within the next few months, especially over a possible boost in the import of their products.
In October, anticipating possible tariffs due to the investigation, importers of Australian wine stocked up: according to Chinese consultancy ASKCI, import of Australian wine in the country jumped 9.3 percent year-on-year during the month, while imports fell drastically for other competitors.
“Many stocked up with an eye on the Chinese New Year,” Nicolai Samsing, the Asia head of promoter Wines of Chile, told EFE, referring to the most important festival in the country, set to be held on Feb. 12 in 2021.
This wine would not be subject to the new tariffs as it was purchased before their imposition, and therefore the impact of the duties would not be too serious until the festival.
It would be only later, when the Australian stock ends and Beijing evaluates whether to extend the tariffs for another five months, when the competition can weigh in and readjust strategies to increase its market share.
Currently, Chile is the largest Hispanic wine exporter to China, both in terms of volume – having sold 15.7 percent of total bottled wine imported in 2019 – and value: around 12 percent.
Spain, cornering 11.2 percent of the import volume and 5.9 percent value last year, was placed fourth in the list of largest importers by volume after Australia – 26.5 percent volume and 37 percent value – and France, which accounted for 29.6 percent of the import volume and 29 percent value.
Argentina – 1 percent volume – and Uruguay have also increased their market share in recent years in a country where around 40 percent of the total wine consumption consists of imports.
Wine constitutes 10.3 percent of the alcoholic beverage market in China – which is dominated by beer with 81.6 percent market share – according to market research firm Euromonitor International.
Most of the sources consulted by EFE said that for now they would continue with earlier sales strategies.
“Our strategy is not based on price or volume. We always maintain a plan based on the consumer and placement in the HORECA (hotels, restaurants, cafes) network,” said Daniel Ramirez of the Pierola winery in Spain, with others echoing the sentiment.
“The news (of the tariffs) is very recent, but also very transcendent. It will especially affect competitiveness, but most of the Uruguayan chateaus are going to continue with their (earlier) plans,” said Federico Lage, the trade in-charge at the Uruguayan embassy in Beijing.
Argentina, which registered a strong growth in the imported bottled wine market during the past year, showed a keener interest.
“We are in contact with different Chinese wineries that traditionally import Australian wine and testing the possibility that they diversify in wine and types of grapes,” said Ezequiel Coppari, the trade in-charge of the Argentine diplomatic mission in Beijing.
“We want to see if they can incorporate Argentine winemakers as suppliers of new labels, varieties and qualities,” said Coppari, although admitting that the sector was currently witnessing “a scenario of uncertainty.”
Meanwhile, Hispanic winemakers have continued efforts to stand out in a market which considers wine a luxury product signifying western taste and sophistication.