Australian wine exports to mainland China could start surging back to their pre-pandemic peaks by the end of March.

The stabilisation of relations means local producers can soon regain access to the huge market, according to Prime Minister Anthony Albanese.

Exporting wine to mainland China was a growing industry worth more than $1.1 billion at the end of 2019, when Australia sent more than 135 million litres.

But it had dropped to about 1.4 million litres, worth just over $10 million at the end of 2023, according to Wine Australia’s export data.

Since 2021, exports to mainland China have been cellared in the basement at their lowest levels since Wine Australia was incorporated at the end of 2010.

But China has signalled the removal of tariffs on Australian wine, enforced during a diplomatic dispute fermented by the outbreak of the COVID-19 pandemic in 2020.

WTO case put on ice

The tariffs were reviewed in October after Australia suspended a case before the World Trade Organisation.

A few good seasons means there is plenty of wine available for export, Mr Albanese said on Saturday.

The interim decision, if confirmed as expected, means more jobs in the regions where the wine industry is based and signals the continued thawing of relations with China.

“It’s an important industry for our nation and it’s important as well that we have a stable relationship,” Mr Albanese said in South Australia, a major wine producer that sent $490 million in wine to mainland China in 2019.

Discussions will continue when China’s Foreign Minister Wang Yi visits Canberra this week.

Premier Li Qiang has also been invited to visit Australia this year for bilateral talks.

The resumption of the wine trade would be a win-win for both nations, Mr Albanese said.

“Australia will benefit from the economic activity that removal of these impediments will bring, but China will benefit by getting access to the wonderful Australian wines,” he said.

‘The confidence that will come’

Smaller growers were reliant on the export trade and had been under pressure due to the tariffs.

“We hope that not just those growers can come through and continue to exist as viable businesses but they will grow in the future with the confidence that will come,” Mr Albanese said.

Local producers diversifying to other markets was a good thing, but China’s market for Australian wine was huge, he added.

“Having it open again is something that will be very positive,” he said.

Pent-up demand had the Prime Minister expecting exports to quickly return to, and then surpass their pre-pandemic peaks.

Reuters reported earlier in March grape-growers were ripping up vines due to oversupply in key production areas.

-AAP