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Coonawarra wineries hope Labor can repair lucrative markets lost amid China trade tension

Some SA growers exported nearly 20 per cent of their product to China before the trade spat. (ABC Rural: Jemima Burt)

Vignerons from one of Australia's leading wine regions are hopeful a change in government will lead to improved relations with China and the removal of crushing tariffs on exports.

The wine industry was caught in the crossfire of diplomatic tensions between Australia and China under the Coalition, resulting in the effective closure of the lucrative Chinese market to Australian wine producers.

Before China imposed a moratorium on Australian wine, Hollick Estates in the prestigious Coonawarra wine district on South Australia's Limestone Coast exported around 20 per cent of its product to China.

General manager Christian Fraser said he was hopeful he would see a return to the market.

"It was a very good market because it was profitable and it was very reliable at the time," he said.

"Engagement is always a very good thing to do, but I'm not sure how it will end up."

Rymill Coonawarra winemaker Lewis White also expressed hopes about the Labor government's ability to move relations in a more positive direction.

"I don't think it will get worse."

But even if tariffs were lifted in the next 12 to 24 months, Mr White warned the damage had already been done.

"I suspect our market share in China would either be replaced, or by the time tariffs lift, would have been replaced," he said.

"If there was an appetite for our wines we would re-enter China, there's many benefits to the market."

The Coonawarra is famed for its terra rossa (red soil). (ABC News: Liz Rymill)

Coonawarra Vignerons Association executive officer Ockert Le Roux was also cautiously optimistic of a change, but said there were no details about how the government planned to move the relationship forward.

"It's still early days," he said.

However, Mr le Roux said it was positive the Chinese government sent a congratulatory message to new Prime Minister Anthony Albanese.

But he also cautioned what type of signal Australia's attendance of the Quad summit had sent to China and how that would be interpreted in Beijing.

Challenges and opportunities

It comes as South Australian Trade and Investment Minister Nick Champion met with winemakers in the Coonawarra this week to discuss challenges facing the sector, including Chinese tariffs and a domestic oversupply.

Mr Champion said the best strategy for the industry was to diversify its export markets and create a high-quality product.

"Obviously, we want to move up the value chain, we want to be making sure that we make a top-quality product but we also get top-quality prices for it."

Rising costs and a fall in global demand has created a domestic oversupply of red wine. (Supplied: Madison Lawson)

Responding to Mr Champion's visit, Mr Fraser said it was a strategy that had served Limestone Coast wineries well.

"We're a little bit insulated because we generally have a high-value product," he said.

"We've got established markets and I don't think too many of us were over-committed into one market.

But with input costs rising for all producers and a decrease in sales globally, causing an oversupply of red wine domestically, the industry finds itself at a difficult junction.

"Labour has been hard to find, fuel costs are up, it's been tough," Mr Fraser said.

"But we're a pretty resilient bunch of people so we sort of work our way through it."

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