THE Australian wine industry outlook is very promising, according to the national body representing the country’s winemakers.
Last week’s signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership paves the way for Australian wine to become more competitive in Canada, Mexico, Vietnam, Malaysia, Japan and Peru.
Tariffs of 1.87 and 4.68 cents/litre on exports to Canada will be removed, which Winemakers’ Federation of Australia chief executive Tony Battaglene said would put Australia on a level playing field.
“Other countries such as the US have got a free trade deal with Canada so they go in tariff-free,” he said.
Mr Battaglene said the TPP-11 would also help Australia’s industry diversify into important Asian markets such as Vietnam and Malaysia.
“China is our biggest market at $1 billion,” he said. “But it’s very important we don’t just rely entirely on China.
“I think in some of the smaller growing Asian markets, with wealthy middle classes that we’re going to see a lot of growth. We saw that when we signed the free trade agreement with (South) Korea for example.”
Mr Battaglene said a previous free trade agreement with Vietnam had cut tariffs, but not eliminated them. Now they would be removed.
“It will take some time,” he said. “It will be another 10 years or so.
“Vietnam is quite a useful market — they’re not huge for us, but very profitable.”
He said Mexico was also a promising market.
Mr Battaglene welcomed improvements in non-tariff measures such as common rules for product labelling.
“It costs millions of dollars to change labels from market to market,” he said.
Brown Brothers chief executive Dean Carroll said the TPP-11 was “certainly positive,” but said exporting wine still had its challenges.
Brown Brothers operates in Victoria and Tasmania and produces about 13 million bottles of wine.
Mr Carroll said the TPP-11 would help make Australia’s wine exports more competitive in the markets involved, but not necessarily generate additional margins.
“We’d be using that benefit to be able to compete within the market,” he said.
Murray Valley Winegrowers executive officer Mike Stone said the free trade agreement was part of the process of building demand for Australian wine around the world.
“If you do succeed in doing that, quite obviously you’re going to need the production to match,” he said.
“So from that perspective as well, it’s good for our growers,” Mr Stone said.
The TPP-11 agreement will need to be ratified by the member countries before coming into force.