Beijing’s decision last week to impose tariffs of up to 212% on Australian wine imports threatened business with mainland China, according to Tony Bataglene, chief executive of Australian grapes and wine, a national association.
Battaglene is working with about 800 wine producers in Australia who have “built their business” on exports to China and are now left without a backup plan, he added.
“We were surprised, we were shocked,” Bataglene told CNN Business. “Given the scope of these intermediate tariffs, I mean essentially that they will close the market for Australian bottled wine, for premium wine in China. There is no way we can compete at these levels.”
Wine tariffs, which took effect on Saturday, forced businesses to quarrel. Following the announcement, some container ships traveling to mainland China had to return to Australia, according to Battaglene.
“Orders are canceled, orders are stopped,” he said. “Nobody wants … to take additional import duties just to go through customs. In essence, the market will be closed to us.”
According to Vice President Tim Ford, some of the wine that TWE is considering for redistribution has already arrived in a port in Shanghai. “We will re-evaluate [what to do with] this product, “he said Monday when he called an analyst.
“We are extremely disappointed to find our business, our partners’ business and the Australian wine industry in this place,” Ford added. “Our focus is very clear on building our business outside of China in the next period of time.”
The plan was not enough to reassure investors. Shares of TWE closed 6.9% in Sydney on Monday, after falling 11.3% on Friday when tariffs were announced.
On Monday, Ford called on the Australian government to help businesses find a solution.
“Left unresolved, there will be a significant impact,” he said. “Things can change and we will deal with them as they change, but we have some kind of deal with the cards we know at the moment, without a strategy of hope, if you will. Because the strategy of hope is not a very smart strategy. “