The latest 10 percent tariff that China levied on American wine imports, starting this week, brings the total tax and tariff rate to 79 percent, adding worries for vintners over access to an increasingly important market.
The tariffs “put our products at a price disadvantage,” says Robert Koch, president and chief executive officer of the San Francisco-based Wine Institute. “We will continue our full slate of promotional activities there to engage Chinese consumers, who are increasingly attracted to California wines. We are confident that the popularity of California wines will continue to grow.”
The tariffs, which are in retaliation for new U.S. tariffs on Chinese goods — part of a dispute over intellectual property and other issues — come as California winemakers have enjoyed something of a boom in the Asian nation in recent years.
U.S. wine exports to China and Hong Kong have grown by 450 percent in the past decade, and were up 10 percent in 2017, to $197 million, and 34 percent, to $118 million, in the seven months through July 2018, according to the institute’s news release. China will soon be second only to the U.S. in the total value of wine sales, the institute notes.
CONTINUING RISE IN EXPORTS
U.S. wine exports to all foreign markets in 2017 — more than 90 percent of which were from California — reached $1.53 billion in winery revenue and 42.2 million cases.
Even with the threat of tariffs looming, U.S. wine exports to China rose 14 percent in value, to $38.4 million, for the first six months of 2018, compared to the same period last year, the institute reported last month.
The institute has a team in China promoting California wines, including “master classes” in cities throughout the country. The organization will hold a vintner tour in October, with stops in Hong Kong, Macau, Guangzhou, Shanghai, Wuhan, Taipei, and Tokyo. Further, the team plans a strong presence at the ProWine China trade show in Shanghai Nov. 13-15, and at the Tang Jia Hui Trade Show in Chengdu March 26-28, 2019.
“California vintners have a long-term commitment to the China market, and Wine Institute continues to execute a full slate of promotional activities there to support our wine exports,” says Linsey Gallagher, the organization’s vice president of international marketing. “While increased tariffs are challenging, Chinese consumers are clearly attracted to California wines and appreciate the high quality and great diversity of wines from the Golden State.”
TOUR FOR VISITORS
China threatened to impose another 25 percent tariff on U.S. wine exports in early August in response to the U.S. threat to impose tariffs on imports of Chinese goods related to intellectual property. Already, a 15 percent tariff was levied in April as a reaction to American tariffs on Chinese steel and aluminum exports.
To expand other markets, the Wine Institute will team with the London-based Institute of Masters of Wine to host 50 visitors from 16 countries for a tour of the Golden State Oct. 18-27. Guests will include sommeliers, wine retailers, restaurateurs, wine writers, and other hospitality leaders.