Grapes of wrath: dark clouds for Australian winemakers as China ties sour
Diplomatic quarrels between Canberra and Beijing are spilling over into the business world, threatening to upset the rising star of Australian exports: wine
Set in the rolling green hills outside the Queensland capital of Brisbane, Sirromet Winery has placed big bets on China. Exports of its Australian vintage now make up 30 per cent of its total sales, double what it was five years ago. Such is its popularity that Sirromet is now visited regularly by tourists from mainland China, necessitating the need for dedicated Mandarin speaking guides.
“The Chinese really buy into the quality of the product and the fact it’s natural and grown in a clean environment,” says Sirromet general manager Rod Hill.
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Last year, Australian journalists on a study tour of the mainland were warned of a possible boycott of a wide range of Australian goods because of what China calls unfounded accusations against the mainland. Now, with bottles of Australian Chardonnay and Riesling languishing dockside, those warnings appear to have been at least partly correct.
Beijing, which until recently had considered Australia a reliable trading partner best known for blue skies, koalas and kangaroos is increasingly angry at Australia for what it considers politically motivated attacks on Chinese citizens living in Australia.
Sirromet’s Hill says his winery has not noticed any delays, but he says they are a smaller operation than Treasury with a lot of sales direct to consumers. Wine has been seen as the rising star of Australian exports. Excluding Hong Kong, Chinese sales hit A$848 million (US$644 million) last year, more than doubling since a free-trade agreement between Australia and China took effect in 2015.
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Now that promising growth is seen as under threat as the diplomatic language gets more heated.
China Daily accused Prime Minister Malcolm Turnbull of being “China-basher-in-chief” after his statement last year that Australia was “standing up” to Beijing. Former prime minister John Howard – a man not known for cosying up to Australia’s Asian neighbours – recently advised the government to mend its fences with Beijing. According to Beijing officials, Canberra’s increasingly tough attitude towards China reflects a “cold war mentality” and, in some cases, is a racially based attempt to make China a “scapegoat” for political point scoring. As one Chinese academic put it: Australia’s “body is in Asia, but its mind is in the West”.
Australian businesses are increasingly the meat in the sandwich of these increasingly nasty exchanges. The high-profile wine sector is not likely to be the only victim. Australian beef and citrus producers along with some in the hi-tech sector now also fear a loss of export markets or investments if relations do not improve.
Andrea Myles, chief executive of the China Australia Millennial Project, has noticed a disturbing hostility towards Australia among the business community in China. “People are starting to say that we don’t want to invest in Australia and why does Australia hate China,” says Myles, whose organisation runs an annual exchange between young Chinese and Australian entrepreneurs.
Back at Sirromet in Queensland, Rod Hill remains positive about ties between Australia and China. He has just sent a team to Hong Kong’s Vinexpo, one of the biggest wine and spirits trade shows in the world, and there was no hint of a backlash from Chinese customers. “The feedback was very positive,” he says. ■
