Leogate Estate Wines stands outside Pokolbin in the New South Wales Hunter Valley, its vineyards nestling at the base of the Brokenback Range.
- Leogate Estate Wines has not shipped its wines to China since January and growing trade tensions are threatening future sales
- China could impose tariffs on Australian goods, in which case small wineries could be collateral damage
- But experts say Australians have made inroads into the Chinese market, and despite current tensions, the Australia-China relationship stands firm
Until the pandemic, this little winery was flying high and taking on the world.
A prestigious international award led Qantas to order its top shiraz for first class passengers, with its next best red being served on business class.
Even more importantly, it had found a market in China.
“We’ve been selling to China for about three years now,” says Bill Widen, who owns and runs the winery with his wife, Vicki.
“Prior to the virus we were getting away a container about every two months — that’s 12,000 bottles or a thousand dozen in a twenty-foot container, in 40-foot container that’s 18,000 bottles or 1,500 dozen.”
Then the virus hit, shutting down sales from the cellar door to Shanghai.
The Widens haven’t shipped to China since January — and growing trade tensions over Australia’s demands for an independent inquiry into the COVID-19 outbreak are threatening future sales.
China could impose tariffs on Australia
China is threatening to impose a massive and prohibitive tariff on Australian barley — a huge blow to agriculture, with barley comprising 20 per cent of WA’s grain exports.
The Chinese ambassador and influential news outlets in China have also warned of a possible “consumer boycott” of Australian goods and services — from education and tourism, to beef and wine.
Bill Widen doesn’t think it will happen.
“The most popular wine at the moment in China, by volume, is Australian wine, so Australian producers have made extremely good inroads into the China market,” he said.
But if it does, vineyards such as this small player from the Hunter Valley will become collateral damage.
“It would be a great disappointment if the market in China is taken away from us, but there wouldn’t be a great deal as a small producer here that we could do about it.”
His wife, Vicki Widen, was also visibly upset as she talked about the trade threat.
“We’ve been through some tough times — droughts and fires and just trying to build up a market internationally,” she said.
“You spend many, many years building a relationship with a country.
“A lot of farmers will suffer. It’s tough being a farmer.”
She knows through experience.
Before starting Leogate winery 12 years ago, the Widens had spent much of their lives raising cattle on a farm near Tamworth, enduring the many travails that nature, and markets, put in the way of people on the land.
Call to handle disputes ‘behind closed doors’
There’s been business backlash against Australia’s decision to court China’s displeasure by publicly calling for an independent international inquiry into the origins of the pandemic, amid allegations that China mishandled the initial outbreak in Wuhan.
WA billionaire Kerry Stokes chided the Morrison Government on the front page of the West Australian newspaper.
And the lobby group for businesses trading with China, the Australia China Business Council, has criticised Australia’s public diplomacy.
“Nation states will always have issues with each other, but I think they’re best not played out in the public arena,” said the council’s chief executive Helen Sawczak.
She argued that the Government’s tactics were threatening a trade relationship that would be vital to Australia’s recovery from the pandemic.
“It’s never pleasant to conduct business in a tense political environment,” she said.
“Our members want good political relations with China and it should be a priority.”
However, Bill and Vicki Widen have no problem with the Government advocating for an independent inquiry into the origins of the pandemic.
“I don’t see how it could be avoided,” Mr Widen said.
China is by far Australia’s biggest export market, taking about 30 per cent of Australia’s exports by value.
Iron ore and coal dominate the relationship, and these mineral exports probably won’t suffer for a number of reasons.
The Chinese steel mills are engineered to take particular blends of ore that Australia supplies and entrepreneurs such as the iron ore magnate Andrew “Twiggy” Forrest have forged close relations with Beijing.
But the flow of Chinese students and tourists to our shores is under threat, as are exports of primary produce and consumer goods.
The Australia-China relationship will survive
On the gates of the Widens’ winery at Pokolbin are two lions, from which the “Leogate” brand takes its name and stone statues of the animals guard the cellar door.
But the king of beasts is no match for the virus and the ensuing trade threat.
Trade experts argue that Australia and China have mutual economic interests and that the spat is unlikely to damage the long-term relationship.
“China after all has issues about energy security, food security, they want good quality education and infrastructure and skills, so ultimately, in the medium turn, the Australia-China trade relationship will be strong.”
But the “medium term” prospect is of little assistance when you’re struggling to keep the wolf from the cellar door.
“To all the farmers out there, chin up — we move on,” says Vicki Widen.