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China-Australia relations

Australian wine firms press Prime Minister Malcolm Turnbull to visit China after diplomatic row puts a stopper on exports

Leading vineyards warn exports could suffer amid ongoing tensions over alleged meddling by Beijing

PUBLISHED : Wednesday, 06 June, 2018, 4:59pm
UPDATED : Wednesday, 06 June, 2018, 10:03pm

Australian winemakers on Wednesday urged Prime Minister Malcolm Turnbull to visit China to resolve diplomatic tensions blamed for trade obstacles that have raised concerns about the future of the nation’s wine export market.

As many as six Australian wine companies, including Treasury Wine Estates Ltd – the world’s biggest-listed winemaker – have faced delays at Chinese customs this year amid the diplomatic rift between Canberra and Beijing.

Australian beef and citrus producers are also calling on the government to do more to resolve the tensions with Australia’s largest trading partner, sparked by Canberra’s allegations of Chinese economic coercion and political meddling.

Tony Battaglene, chief executive of industry body the Wine Federation of Australia, said company representatives would hold talks with Assistant Minister for Agriculture Anne Ruston on Wednesday, when it will be suggested that the prime minister travel to China.

“There is obvious concern about China from the government but for us, we must all be aware that they are an extremely important strategic partner for us.”

Beijing has shunned Australian officials in recent months, casting doubt on a visit to China by Turnbull expected some time later this year.

Left unresolved, the issue could become a sore point for the government ahead of elections due next year.

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“The prime minister has indicated a willingness to go to China. It obviously has got to be married against a number of other competing demands in terms of time,” Trade Minister Steven Ciobo told reporters in Canberra.

“There is a trade irritant that is there, but when you put it in the context of where trade is going, when you look at the growth we’ve had of beef and wine exports, I think it is important that we don’t mischaracterise what is happening.”

Ciobo last month became the first elected Australian official to travel to China in more than seven months, but he was largely shunned during his three-day visit.

Australian Foreign Minister Julie Bishop has not visited China since 2016.

Turnbull did not immediately respond to a request for comment from Reuters. Chinese customs and commerce ministry officials also did not immediately respond.

China has denied the allegations of meddling in Australian political affairs and says there have been no unusual restrictions on Australian exports.

While the Australian wine industry has not put a value on the exports languishing at China’s ports, investors are concerned as winemakers increasingly rely on rapidly growing their Chinese sales to boost earnings.

The share price Treasury Wine, which owns major brands such as Penfolds and Lindeman’s, has dropped 9 per cent since the Chinese customs delays were revealed on May 17.

Battaglene said Australian government lobbying had seen wine shipments begin to slowly flow again into China, but a backlog remained. Australia’s wine exports to China were worth A$848 million (US$647 million) last year.

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Although wine is bearing the brunt of China’s frustrations, other agricultural producers are concerned they are also being sidelined.

When Chinese Premier Li Keqiang arrived in Sydney in March 2016, he agreed to increase access for Australian beef exporters, a boon to a trade worth US$569 million last year.

Despite agreements being signed to more than double the number of processors permitted to sell to China, Patrick Hutchinson, chief executive of the Australian Meat Industry Council, said 26 companies were still waiting for permission to begin exports.