Buy Aussie wine!

Australia | More than 200 parliamentarians from 19 countries are calling on people to drink Australian wine in protest against the brutal tariffs slapped on the country by China. The Inter-Parliamentary Alliance on China (IPAC) describes itself as a “cross-party group of legislators working towards reform on how democratic countries approach China”.

Commenting on the imposition of tariffs, Ryan Whittaker, Consumer Analyst at GlobalData, a data firm, said: “The temporary tariffs which China has imposed on wine imports will severely impact Australian wineries and the wider Australian economy. […] Many observers conclude that these decisions are based mainly on strategic overlapping of political and trade positions rather than a response to some objective issues.”

Mr Whittaker went to explain that “combined with the economic consequences of covid-19, a projected 7 percent unemployment rate for 2021 and the GDP contraction in April–June 2020, the effect of China’s strategy will brutally impact the Australian wine sector and destabilise the wider economy for the next few years.”

Demand for wine in peril

“China’s move could result in more wine stocks being allocated at cheaper prices to the next-largest export markets, including the US, the UK and Canada,” he added. “However, these markets are also experiencing significant economic downturns. Significant unemployment in the US and the UK, coupled with uncertainties around Brexit, is likely to reduce disposable income in those markets. In addition, the reduction in social occasions due to the pandemic means that demand for wine will remain suppressed.”

According to GlobalData’s research, as of November 2020, one in four UK consumers is buying less wine or has stopped purchasing it altogether. For the US, the rate stands at one in five.

GlobalData forcasts that Aussie wine exports will remain caught between a rock and a hard place for the immediate future.