One of Australia’s largest wine exporters said a trade deal with the UK could reduce the cost of quality wines for British drinkers and help fill the void left by China’s exports.
Australian wine companies have struggled to keep up the high prices to 218% of Beijing last year as political and economic tensions between the two countries intensified.
Limestone Coast Winery, one of Australia’s 20 largest wine retailers in terms of price, profits “expired overnight” as China earned about 50% of its revenue and capital.
“It was a ‘Friday’ when tax rates dropped,” said Richie Vandenberg, South Africa’s chief manufacturing officer. In fact, the export of Australian wine to China drives 96% annually between December and March, according to a study from Wine Australia, a government agency.
But the hope of a tax-free, free price UK-Australia trade agreement has strengthened hopes that the UK will achieve what China has left behind.
Wine then exports most of Australia to the UK, ahead of the lamb, but they have a tax that increases by about 10p to 12p per bottle of wine, according to Wine Australia.
Limestone Coast Winery, which is behind The Hidden Sea brand and also offers supermarket wines, said this makes the country “a” lowest market for its products but that tax payments can be competitive.
Justin Moran, founder of the company, said: “Chilean wine has a 13% higher tax rate than us in the UK. If Australia can do better with the UK it will greatly benefit Australian wine and benefit UK consumers.”
UK-Australia alliance is embroiled in controversy after farmers warned that cattle and a tax-free lamb from the Down Under could have a problem with farming in the UK. The Australian Agricultural Company, which sells the country’s largest animals, said this week that a free trade agreement could be reached promoting its business in the UK ten times.
Vandenberg, a spokesman for the Coonawarra region where the group produces its fruit, said the UK and Australia are the largest exporters of nature. “I feel sorry for the Scottish farmers but it would be a shame if they stopped the trade agreement between the UK and Australia,” he said. “We are business partners. UK retailers have been successful.”
Not all Australian growers are saving money in the ‘old country’ to end China’s tax evasion. Accolade Wines, which owns Hardys and Echo Falls brands, says it will happen send wine to Chile and elsewhere in China to pass taxes.
Exports of wine to Australia in the UK grew by one-third to $ 461m between December and March, while the volume shipped increased by a fifth to 264m a liter. The average price for importing Australian wine in the UK increased by 10% to $ 1.75 per liter, the highest in a decade.
Limestone Coast Winery, which has sold 100m liters of wine since its inception in 1998, hopes to use the proceeds of the UK to promote the Hidden Sea brand – which uses profits to remove plastic from Indonesian seas.
Moran criticized some UK retailers and the government for “blowing up” single-use plastic because more waste is exported to Turkey and Southeast Asia. “They’re the only ones left but they still hit their chest about removing the plastic,” he said.
Vandenberg is a portrait of Australian Lawmakers who played for Hawthorn club 20 years ago and was a member of the well-known club ‘line in the sand’ riots.
“People know me from the AFL which is a tough, tough game – but here I’m throwing plastic into the ocean,” he said, adding that people don’t have to be dangerous “greenies” to solve problems like plastic damage.