Australia's Wine Sector and the Impact of the China Trade Situation

Senator Glenn Sterle questioned the impact of the China trade situation on the Australian wine industry. Matt Lowe, from the Department of Agriculture, Fisheries and Forestry, outlined the department's role in supporting the industry's profitability and sustainability. The department works closely with Wine Australia and Australian Grape and Wine to address challenges such as natural disasters, shifts in consumption, and the temporary closure of the Chinese market. To combat these issues, the department is focused on building long-term demand for Australian wine through market diversification and expansion. The department has supported industry in exploring new markets and promoting Australian wine abroad. Recent trade negotiations and a focus on emerging markets, such as India, are also underway. The Viticulture and Wine Sector Working Group was convened to address ongoing oversupply and competition issues, leading to an independent impact analysis of the wine and grape sectors' regulatory options. Mick Keogh from the Australian Competition and Consumer Commission discussed the ACCC's market study into the Australian wine grape sector. The study led to an investigation into unfair contract terms and resulted in several large winemakers amending their contracts. The ACCC has not recommended introducing a mandatory code of conduct, instead suggesting changes to the current voluntary code should be made after industry consultation. In terms of the current trade situation with China, Matt Lowe noted a $1 billion reduction in trade value due to the trade disruption. Since trade resumed, there has been a $600 million impact in terms of return to value over the past six months, indicating a significant but partial recovery of the Australian wine industry's trade with China.