Online wine retailer Naked Wines has unveiled a $5 Million Rescue Fund to help support Australian independent winemakers who are the biggest casualties of China’s abrupt and hefty wine tariff hikes.
This announcement of the fund comes as the company launched a “Stop the Squeeze” campaign as a means to support the independent winemaking community. The fund will offer a new home to sell their best wines at a fair price, with direct connection to Naked Wines’ network of more than 100,000 local and over 750,000 global customers.
Managing Director of Naked Wines Australia, Alicia Kennedy said that around 15 per cent of Naked Wines’ local independent winemakers would be affected by China’s tariff hike, and that they are the most impacted yet least resourced to face the challenge.
“With the China tariffs story quickly developing, we are hearing first-hand from Naked’s community – and other winemakers around Australia – about the potentially crippling challenges they are facing,” Kennedy said. “Australia’s independent winemakers have been caught between a rock and a hard place with the sudden tariff hikes of up to 212 per cent on top of an already tough year. The reality is that winemakers reliant on traditional channels are going to suffer the most over the next 12 to 18 months.
“For the smaller winemakers and grape growers, there’s a lot of fear and uncertainty around their future; they have committed to vintage and invested upfront, and they’re understandably very concerned they’ll be driven to the wall by retailers dropping or bartering down their contracts to take advantage of cheaper sources,” Kennedy added. “Unlike the bigger winemakers, many of Australia’s independent winemakers don’t have the balance sheets needed to pay the tariffs or to hold their wine in storage for future years when there will be less flowback supply into the market. This will place deflationary pressure on the prices of their grapes and wine, taking advantage of their vulnerability and leaving them holding wine and fruit from dropped contracts and commitments.”
Harold’s Wines’ Ralph Dunning, who is also chairman of the Drinks Association, is one of many independent winemakers affected by the tariffs.
“For our business, the knock-on effect is enormous. Practically overnight, we have lost at least 50 per cent of our turnover,” Dunning said. “We have growers, whose fabulous fruit we have purchased annually, that will need to be prioritised and rationalised. We have suppliers of dry goods like bottles, cartons, capsules and labels that will experience a huge downturn in their businesses as we try to re-balance our business.
“Most importantly, we have employees – who are our friends and their families – that we’ll now need to have awful discussions with around their working hours, or whether or not we can even afford to continue employing them,” Dunning lamented.