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Aussie wine exporters expect to benefit as tariffs to China shrink

Xinhua | Updated: 2017-01-06 11:24

CANBERRA - Australian winemakers and exporters are hoping for a boost in profits from this week, as tariffs to China are further reduced as a result of the China-Australia Free Trade Agreement (ChAFTA).

China is the nation's largest export market for wine, with the export side of the industry now worth almost $375 million annually, however, with the further tariff reductions, China's middle class will be able to access more wines at a cheaper price, something exporters hope will contribute to a bigger bottom line.

Since Chinese wine connoisseurs first developed a taste for premium Australian wine, growth in the wine export business has steadied, but with the tariffs falling to just 5.6 percent from this week, exporter Kandy Xu expects the growth rate to jump yet again.

"In the beginning we exported about two containers per year, but now from last year we export 15 containers," she told the Australian Broadcasting Corporation (ABC) on Friday.

Before ChAFTA, Australian wine was subject to a 14 percent tariff before it hit Chinese shelves, however the Winemakers' Federation's Tony Battaglene said as the tariff rate continues to reduce before hitting zero by 2019, Australian winemakers and exporters can get a real leg up over the competition.

"China's now our biggest market, so this is a great chance to increase our profits," Battaglene told the ABC.

"We've got around 24 percent, 25 percent of their market ahead of France. We're now beating the old world at their game so that's a really good outcome for us."

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