Naked Wines, the world’s fastest-growing direct wine-to-consumer business, announced an AUD $5 Million Rescue Fund and a number of public commitments to help support quality Australian independent winemakers who are set to take the hardest hit from China’s sudden and hefty wine tariff hikes. The company, which connects over 100,000 Australian everyday wine drinkers with Australia’s best independent winemakers, called on winemakers, retailers and consumers to unite to ‘Stop the Squeeze’ on Australia’s independent winemaking community, and announced a new fund and commitments to support quality local independent winemakers and growers.
Managing Director of Naked Wines Australia, Alicia Kennedy said around 15 per cent of Naked Wines’ local independent winemakers – plus a much larger ecosystem of growers, bottlers, employees and community – would be affected by China’s tariff hikes, with Australia’s independent winemakers likely to be the most impacted yet least resourced to endure the struggles ahead.
‘Stop the Squeeze’ – in Focus
The launch of ‘Stop the Squeeze’ has three key commitments designed to support quality Australian independent winemakers and positively influence Australia’s wine industry and market at large:
- Certainty for winemakers: A public pledge to honour commitments made to all of its independent Australian winemakers. Naked Wines Australia will not drop contracts with its winemakers and their growers to take advantage of cheaper sources.
- Fair prices for all – A public pledge to continue its commitment to delivering fair prices to winemakers and customers so that everybody wins. This principle has been central to Naked Wines’ unique business model since the company was founded.
- A $5 Million Rescue Fund – Launching on 8 December to support talented Australian independent winemakers feeling the grip of the recent tariff hike. This fund will offer its winemakers 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.
Everyday wine drinkers can also get behind the cause by purchasing and enjoying the quality wines of Australia’s best independent winemakers, many of which are sold direct from winemaker to customer at fair prices via Naked Wines.
Immediate toll on Australia’s Independent Winemakers
Several award-winning independent winemakers who supply through Naked Wines have also spoken out about the impacts of the tariff hikes on their businesses and called on Australian wine drinkers to support their local industry. These include Soul Growers’ Stu Bourne, Tomich Wines’ Randal Tomich, Rosenthal Wines’ and Singlefile Wines’ Coby Ladwig and Byron & Harold’s Wines’ Ralph Dunning, who is also chairman of the Drinks Association.
“The Chinese Government’s decision to pre-emptively impose crippling tariffs on Australian wineries has knocked our business for six. After investing eight years travelling to China at least four times per year to educate and build strong relationships with quality-focused local wine professionals, we now have a situation where our wines are subject to a 212 per cent duty and therefore are not viable, price wise, in the market. This has been devastating for a small, quality-driven wine enterprise that is self-funded.
For our business, the knock-on effect is enormous. Practically overnight, we have lost at least 50 per cent of our turnover. 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,” said Ralph Dunning.
“The China tariffs have hit us pretty hard. While we dealt with the COVID shutdown of exports earlier this year, China was starting to ramp up buying our wines to stock up for the Chinese New Year when they announced the latest tariff deposits. This is a 207 per cent increase to our importers who have had to cease all orders. It’s pretty devastating. China equates to just over half our wine sales, and having this hit us just before Christmas is very tough. We unfortunately already had a shipment on the water when they announced the latest tariffs, and there is now a lot of uncertainty about what is going to happen with this shipment,” said Coby Ladwig.
“The effect on our small business has been immediate, with cancellation of several orders. The true extent of the impacts will become more apparent in the coming weeks, but we are not hearing of any long-term solutions at the moment. The most disappointing part is the prospect that all the years we’ve worked to develop long-term business relationships will go to waste – and that we’re now without plans for the future. The tariffs have already had serious impacts, but the potential long-term effects look much more severe. It will take significant time, work and resilience to bounce back – but it’s unfortunately out of our control. We need support from the industry and Aussie wine customers to get through this,” said Stu Bourne.
“Export is fickle at the best of times! I have long loved China and its people, ever since my first visit there in 1992; I’ve also had strong business in the Chinese market since 2007. The current situation is crippling, with one-third of our wine market stalling and stopping trade. We have orders pending and stock stuck in customs – and no one has any answers, Our broader industry is already feeling the impacts, with fruit prices dropping and big companies putting everything on hold. It is also horrible for our growers, especially after the tough times they’ve had in the past few years. Once the big wine companies lose confidence, it will bring the whole industry down – and fast! We need everyone to rally behind Australia’s winemakers and growers this Christmas; we produce the best-value quality wines in the world – and now, more than ever, we need Aussie wine drinkers to buy local,” said Randal Tomich.
Naked Wines’ ‘Stop the Squeeze’ campaign further reflects the company’s unique model and ongoing commitment to backing talented independent winemakers for the greater good of winemakers, wine drinkers and the industry at large. Naked Wines directly connects its winemakers to more than 100,000 Australian customers and a potential 750,000 global customers – enabling its winemakers a fair go to freely produce great wine, at fair prices, and sustain their livelihoods. In the last 12 months, Naked Wines has raised more than $329,000 to help Australian winemakers and their rural communities devastated by bushfires, as well as establishing a COVID relief fund of AUD $5 million, which has so far benefitted more than 40 independent winemakers globally, including some wonderful Australian winemakers.
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