With a bumper harvest underway, wine growers pin their hopes on an end to Chinese tariffs

With a bumper harvest underway, wine growers pin their hopes on an end to Chinese tariffs

Wine growers in New South Wales are celebrating after reporting a 50 per cent increase in yields amid renewed optimism that China’s tariffs on the industry will be lifted.

Concerns remain, however, over an oversupply of grapes that is pushing prices down, in particular for red wine producers.

Winery owner Nick Segger said while harvest would continue until the end of March, quality and quantity were up from previous years.

“The yield so far has been really good and we are really happy with the quality,” he said.

“From what we have seen both in the winery from the grapes that have been picked and what we are seeing on the vine currently, we are all really excited about what the 2024 vintage is going to bring.”

Nick Segger says conditions have been perfect for harvest.(ABC Central West: Hamish Cole)

Mr Segger, the president of the Orange Vignerons Association in NSW’s central west, said conditions could not have been better for growers over summer, with consistent rainfall and warm temperatures.

“That has presented some really nice conditions. It is hard to compare one year to another, but at the moment I think a lot of people around the region are really excited.”

In the Hunter Valley, wine grower Bruce Tyrrell saw the yield fall by up to 30 per cent compared with last year. 

However, with the majority of wine in the Hunter Valley going to high-end markets and an oversupply impacting the industry, Mr Tyrrell said the key behind this year’s vintage was a considerable improvement in quality. 

“The reds have got great colour and flavours,” he said. 

“They are going to be some super wines. I know we say that every vintage, but this year it is for real.” 

Bruce Tyrrell says grape quality has been some of the best in years.(ABC Upper Hunter: Amelia Bernasconi)

China export hopes

It comes as Australia’s trade minister, Don Farrell, prepares to meet with his Chinese counterpart later this month, with trade blocks on seafood and wine a point of discussion.

In 2020, China introduced a 218 per cent tax on imports of Australian wine that caused the $1.2 billion trade industry to the country to collapse.

There are hopes this month’s meeting will lead to the removal of the tariffs as early as March.

“It could mean up to a 20 per cent increase in sales, which would be very handy right at the moment,” Mr Tyrrell said. 

Since the tariffs were introduced, producers have attempted to diversify the country’s export market, with an increase in sales to the UK, Europe and North America. 

Despite this, exports have fallen from a record high of 852 million litres in 2018 to 621 million litres in 2023, according to Wine Australia.

Mr Tyrrell said it highlighted the importance China still played in the wine industry. 

“We have gone out and found lots of other markets; in the past 12 months, seven new markets have opened but nothing is as big as China. 

“If they don’t start buying again, then there is probably a massive restructure for the Australian wine industry required.” 

There is a two-billion-litre oversupply of wine, according to Rabobank Australia.(ABC Riverina: Lucas Forbes)

Oversupply issues remain

According to Rabobank Australia, there is currently a two-billion-litre oversupply of wine in Australia.

With exports falling by 231 million litres over the past six years, this has flooded the Australian market. 

It resulted in the average value for inland red wine in 2023 falling to $304 per tonne, the lowest price ever seen.

Griffith-based producer and Riverina Winegrape Growers chairman Bruno Brombal said they had had a fantastic harvest with yields up 50 per cent from last season. 

But despite the positive picking for many, the glut in the market was pushing people out of the industry, he said.

“Prices are so low that it is not sustainable; growers are in danger of getting out of the industry.”

Bruno Brombal says the loss of exports to China has created a domestic oversupply.(ABC Riverina: Lucas Forbes)

Mr Brombal believes the opening of Chinese markets will go some way to alleviating the pressure on the sector, but changes need to be made to prevent gluts in the market.

“We are hoping this year is rock bottom and next year it will come back with China opening the export market again, but we need to lose probably 25 per cent of our wine grapes in Australia to go back to a balance.”

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