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Where does Australian wine attract preferential tariffs?

Market Bulletin | Issue 145
Image: Adobe Stock
27 Feb 2019
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More than 60 per cent of Australia’s wine production is exported. Consequently, global trading conditions and access to markets overseas is crucial to the on-going success of the Australian grape and wine community.

Some countries have in place international trade measures for several reasons, including to provide protection for local industries. Most trade measures impose some cost (money, time, bureaucracy, quota) on trade that alters the price or availability of the imported product relative to the domestic product.

The most common trade measure is a tariff—essentially a tax on imports that adds to the cost of imported goods. Australian wine is faced with tariffs in various export markets. However, through free trade agreements (FTAs), some tariffs are reduced or eliminated, benefitting Australian exporters.

Australia has entered into 11 FTAs with individual countries or groups of countries and a number of other agreements are under negotiation. In this bulletin, we summarise some of the key tariff benefits for Australian wine in these markets[i].

Figure 1: Overview of tariffs on Australian wine as at 1 January 2019


Australia’s wine exports to China accelerated after the introduction of the China–Australia Free Trade Agreement (ChAFTA), which entered into force in December 2015 (Figure 2).

In 2008, 427 Australian wine exporters shipped 15 million litres of wine valued at $73 million to mainland China; fast forward to 2018, 2003 Australian wine exporters shipped 163 million litres of wine valued at $1.03 billion to mainland China, a growth rate of 7 per cent in volume and 22 per cent in value, compared to 2017.

Figure 2: Australian exports to China 2008–18

ChAFTA provides Australian wine exporters with a competitive advantage over most key competitors. As of 1 January 2019, the import tariff rate on Australian wine was eliminated completely, while European Union (EU), South African and Argentinian wine producers face a 14 per cent tariff. Chile and New Zealand negotiated zero tariffs before Australia, while wine exporters from the United States of America (USA) are currently are subject to a tariff rate of 24 per cent.

European Union (including the United Kingdom)

The EU is a significant market for Australian wine, comprising 28-member countries (including the UK). In 2018, Australia exported 350 million litres of wine valued at $596 million to EU member markets.

Australian wine faces an import tariff of €0.13 to €0.15 per litre. Most other countries are in the same position, except Chile and South Africa, which have had zero tariffs on wine since 2009 and 2012 respectively.

However, Australia has had an agreement on wine with the EU for more than 20 years that eliminates a number of non-tariff measures. This agreement continues to facilitate the export of Australian wine to the EU and gives Australian exporters a significant competitive advantage. Australia and the EU launched negotiations for an FTA on 18 June 2018.

Australia and the United Kingdom (UK) signed an agreement in January 2019 to facilitate the continued trade in wine post-Brexit. EU rules provide that the UK may not commence FTA negotiations with third-country parties until after Brexit.


The United States of America (USA) is the world’s biggest wine market. According to USA publisher Shanken’s Impact Databank, 327 million cases of wine were consumed in the USA in 2017. This equates to 12.4 litres per adult. In 2018, Australia exported 161 million litres of wine valued at $424 million.

Australia has had an FTA (AUSFTA) with USA since 2005 and Australian wine attracts a zero tariff, as does Chilean, Mexican and Canadian wine. The EU, New Zealand, South Africa and Argentina face an import tariff of between US$0.063 and $US0.169 per litre, depending on alcohol content.


Canada is Australia’s fourth largest wine export market by value. In 2018, Australian wine exporters shipped 74 million litres of wine valued at $209 million.

Australia and Canada’s FTA is part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This agreement is between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam and came into force on 30 December 2018. The CPTPP means Australian wine does not attract the existing C$0.0478 per litre tariff that EU countries face. New Zealand and Chile receive the same benefits as Australia, while USA and Mexican wine are also tariff free due to the North America Free Trade Agreement (NAFTA).

New Zealand

Australia and New Zealand have had an FTA (ANZCERTA) in place since 1983 with Australia exempt from the 5 per cent import tariff faced by other wine exporting countries. Australia is by far the leading source of imported wine, with a 78 per cent share of total wine imported by New Zealand.

Through the CPTPP, Chile, Canada, Peru and Mexico are now on a level playing field with Australia.


The Japan–Australia Economic Partnership Agreement (JAEPA) entered into force on 15 January 2015. The tariff on bulk wine was eliminated immediately, while for bottled wine the tariff is currently 5.6 per cent and will be eliminated completely by April 2021. Overall, Australia’s wine exports to Japan increased by 17 per cent in 2018, to reach $55 million, a record level.

Countries without an FTA with Japan face a 15 per cent tariff on wine.

Chile negotiated an agreement before Australia under which its tariff will be reduced to zero in 2020.Through the CPTPP, wines from Canada, Mexico and Peru will have their tariff phased out over eight years. The EU FTA with Japan came into force on 1 February 2019 with the immediate elimination of the tariff on wine, thus giving EU wine an advantage over that from Australia.

The USA started negotiations for an FTA with Japan in September 2018.


Malaysia is Australia’s 10th most valuable wine export market, with $32 million of wine exported in 2018.

Australia’s agreement with Malaysia is part of the CPTPP, under which the current tariff on Australian wine of MRL7 per litre will be phased out to zero over the next 15 years. The CPTPP partners such as New Zealand, Chile, Canada, Mexico and Peru will also benefit from the zero tariff. The same benefits will not apply to the EU, USA, South Africa and Argentina.


Wine is a small, but growing category in Thailand’s alcoholic drinks market and Australia is the second largest exporter by value to the country behind France.

The Thailand–Australia FTA (TAFTA) came into effect on 1 January 2005. The tariff on Australian wine was eliminated in 2015, while the current rate for most other exporting nations is 54 per cent. This provides Australia with a significant competitive advantage over most wine exporters, except for New Zealand, which negotiated a zero tariff before Australia.

Chile will benefit from a zero tariff by 2022, but the EU, the USA, South Africa and Argentina receive no benefit.

South Korea

Australia is the sixth largest exporter of wine by value to Korea behind France, Chile, Italy, the USA and Spain, with exports in 2018 valued at $18 million.

The Korea–Australia Free Trade Agreement (KAFTA) came into force on 12 December 2014, when the tariff on Australian wine was immediately eliminated. This placed Australia on an equal footing with the EU, the USA, Chile and New Zealand. Other countries face a 15 per cent tariff. Argentina is currently in negotiations.


Philippines and Australia’s trade agreement is part of the ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), which came into force in January 2010 for Australia and eight other signatories; Laos, Cambodia and Indonesia followed in 2011–12. The countries of ASEAN are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The tariff on Australian and New Zealand wine is zero, providing a 7 per cent tariff advantage over all other wine exporting countries.


Vietnam and Australia’s trade agreement is formed under both the CPTPP and the AANZFTA. As a result, tariffs for Australia (and New Zealand) will drop from 50 per cent to 20 per cent on 1 January 2022 and then to zero by 1 January 2029. Tariffs on Chilean wine will reduce to 20 per cent in one step in 2025 and then to zero by 1 January 2029.

The EU FTA with Vietnam may enter into force in 2019 and the tariff would reduce to zero in eight equal annual stages.


Mexico and Australia’s trade agreement is part of the CPTPP, where the tariff on Australian wine and for the other signatories will reduce to zero over the next 10 years. This places each CPTPP signatory country on an equal footing with USA, Chilean and Canadian wines, which are tariff free. Exporters from the EU, South Africa and Argentina face an 18 per cent tariff.

Other market tariff arrangements

Singapore and Hong Kong are another two key markets for Australian wine. While Australia has an FTA with Singapore (SAFTA), this provides no tariff benefit, however, all wine exports are tariff free. Negotiations with Hong Kong have concluded, although an FTA is not yet in force. All wine exports to Hong Kong are already tariff free. 

Australia and India also launched negotiations for a Comprehensive Economic Cooperation Agreement in May 2011. There have been nine rounds of negotiations, the most recent of which was held in September 2015. All countries currently face a 150 per import tariff on wine exported to India.

Obtaining the benefit

It is the importer who applies for the reduced tariff and they do so either on the basis of a declaration that the imported product is of Australian origin or on the basis of a certificate attesting to Australian origin. The particular requirement is defined by the specific FTA concerned. In some cases (e.g. TAFTA), the certificate must be obtained from state-based chambers of commerce while in others (e.g. ChAFTA), Wine Australia can issue the certificate. Either way, the direct financial benefit accrues to the importer.

For more information on these markets and others, see Wine Australia’s Export Market Guides and Market Insights reports.

[i] In some markets there are regional tariffs in addition to national measures. These have not been covered.

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.