The wine businesses in the US state of California, accounting for 90 percent of the country's total wine exports, are concerned about the long-term market loss in China as a result of the US-initiated trade war against China.
"It's the future opportunities that we feel we might lose out on," said Michael Parr, vice president of international sales for Wente Family Estates, on Saturday.
The Livermore, California-based Wente Vineyards, is the oldest family-owned winery in the United States. It has been exporting wines to China for 25 years.
Parr said they have significant room for development in China, but the frustration with the tariffs is withholding them from expanding beyond the current market share.
The California wine exports to China have been adversely affected after China imposed 15 percent and 10 percent on US imports in April and September last year in response to an earlier US move to slap steep tariffs on Chinese products.
In an escalation of the trade tensions, Washington on May 10 increased additional tariffs on 200 billion US dollars' worth of Chinese imports from 10 percent to 25 percent, and has threatened to raise tariffs on more Chinese imports. In response, China raised additional tariffs on a range of US imports on June 1.
"Overall the US wines have seen a very positive perspective in China and the industry has been working hard in the market over the past years. Often times, we are seen as being expensive, but quality driven," he said. "I think Chinese consumers would love to get their hands on more California wines."
However, each additional round of tariff has made it "more and more difficult" for California wines to compete in "the fastest-growing wine market in the world," Robert Koch, president and CEO of Wine Institute, has said.
"It is imperative to resolve this dispute as soon as possible, so that our wineries do not suffer long-term market loss," Koch said.
For every bottle of Wente Wine that has been depleted on the shelf in China, there are dozens of wine producing countries that are competing for that same shelf space, said Parr.
Some of the biggest wine producing countries, including Australia and Chile, now have free trade agreements with China. "Those wines can go into that market duty free, and here we are at a tax rate of 93 percent -- that's no longer a level playing field for US wines," said Parr, adding that the Chinese market will soon be the second only to the United States in terms of the total value of wine sales.
"We will maintain relationships with our importers in China. We are in communication on a regular basis," said Parr. "We haven't lost faith completely. I'm confident that eventually these tariffs will be lifted and we will be back in the market."
California Wine Institute said it would continue with marketing efforts as well as educational and promotional events in China to maintain the market influence of California wines.
Last year, the organization carried out a slate of promotional activities in China, including a new round of "Master Class seminars" and California wine tasting events.
