SWAN Hill grape growers are salivating at the news of Australia’s free trade agreement with the UK, especially after losing out to China’s imposed tariffs.
The UK is Australia’s biggest export market for wine, and the “inland” region, which includes Swan Hill, produces the lion’s share.
Chair of Murray Valley Wine Growers, Chris Dent, says the latest agreement will only strengthen UK drinkers’ preference for Victoria and NSW tipples.
“It’s the largest export by volume, the equivalent of about 365,000 tonnes last year,” Mr Dent said.
“We produce 1.5 million tonnes, so it’s about 25 per cent, and most of that is from the inland region – Swan Hill, Mildura, Griffith and the Riverland.
“The US is about 190,000 tonnes, the next biggest was China at 110,000 tonnes – which has nearly disappeared overnight with the tariffs.”
Australia’s wine industry has been grappling with hefty tariffs of up to 218 per cent imposed by Beijing last year as diplomatic and economic tensions between the two countries increased.
The removal of tariffs from the UK presents some opportunity to “soak up” the fruit that was otherwise going to China.
“China was a very profitable market whereas the UK is more competitive, so the markets aren’t quite the same,” Mr Dent said.
But the reduction of tariffs means it will be more affordable for UK consumers, which means hopefully more purchases.
“We produce the entry level ‘weekday wines’, we call them – Jacobs Creek and the Yellowtails – that’s where a lot of what we produce goes,” he said.
“From the inland region we produce a million tonnes out of the 1.5 million tonnes Australia exports.”
Australian Grape and Wine chief executive, Tony Battaglene, said the deal was positive news for Australian grape growers and winemakers looking to diversify their export footprint and expand in the years ahead.
“We’re hoping the final text of the agreement will address a range of costs and barriers Australian wine exporters currently face in the UK,” he said.
“We know there is more work to do on the detail, but the elimination of tariffs is critical for our sector.”
