Producers see export benefits
WA's premium wine and food producers have hailed free trade with China as a potential revolution, allowing them to broaden existing lucrative markets and create new ones.
Producers of high-end wine, seafood and truffles are eyeing expansion in an attempt to tap the sought-after and growing market of the Chinese middle class, who are increasingly looking to spend their wealth on luxury produce.
Sandalford Wines chief executive Grant Brinklow said they planned to send five containers with 14,400 bottles of fine wine to China in the coming year.
He said Sandalford had sold into China for more than 12 years but the free trade agreement signed this week added to bullishness about the market.
"Right now, we are just at the tip of the iceberg," Mr Brinklow said.
"This may well help to smash the door open to an explosion in additional sales over coming years."
WA, particularly Margaret River, had a strong reputation for premium wine and removing tariffs of between 14 and 20 per cent would level the playing field with other regions that already had free trade agreements, such as Chile and New Zealand.
Exports from WA wineries to China grew 282 per cent in the five years to the end of 2012-13.
Wine Industry Association of WA boss Larry Jorgensen said China was our most important export market and would play a key role in plans to double exports in three years to $100 million.
"New Zealand now exports 68 per cent of what it produces and we are at about 13 per cent, so we are obviously underperforming in that area," Mr Jorgensen said.
He said the Chinese were still evolving as wine drinkers and more established markets, including the US, remained important.
Truffle Producers of WA chairman Mark Horwood said South West farms produced 80 per cent of Australia's truffles, which were lauded in Europe, but the industry had been unable to crack the Chinese market.
Mr Horwood believed the FTA gave Australian produce the seal of approval Chinese buyers needed. "For us, it is perfect timing," he said.
"In the next five years, we will treble our production, so we are looking for new markets."
Producers of premium seafood such as rock lobster and abalone would benefit from the certainty the FTA provided, as well as the ability to compete with New Zealand and others, said WA Fishing Industry Council chief executive John Harrison.
The WA pearling industry would also welcome the chance to provide luxury products to China.
Colin Barnett said food exports had traditionally been in bulk products such as grain and meat but WA would now become a major source of niche goods.
In a meeting with representatives of the Guangzhou province, the Premier "mentioned truffles and abalone and their eyes lit up".
A major benefit of the agreement would be to "give more status to China-Australia trade, particularly in China", Mr Barnett said.
WA Chamber of Commerce and Industry chief economist John Nicolaou cautioned businesses to research the markets they were targeting before rushing in.
WA may also need to improve infrastructure, such as ports, roads and railways, to ensure product got to market in a timely manner, he said.
Adam Handley, WA president of the Australia China Business Council, said agriculture, education and tourism providers and health, construction and engineering services would benefit.
Mr Handley said the relaxation of Australia's thresholds for foreign investment was also expected to "generate a significant increase in Chinese interest" in WA resources projects.
Curtin University economist Michael Thorpe said so-called tier two and three cities across China offered the biggest opportunities.
