A Chinese agribusiness hopes the recent free trade agreement (FTA) reached with Australia will lead to simplified quarantine protocols for fruit imports, and is also upbeat about its implications for the wine trade. 

Speaking at an international wine event on Nov. 18, Joyvio president Chen Shaopeng said while the company was a partner with Australia's Perfection Fresh and had sourced from other producers as well, the country's high labor costs and tariffs meant more attention was given to Chile, which also had an FTA with China.

Chen said he was not familiar with the nitty-gritty of the deal, but hoped it would also help improve inspection and quarantine procedures for Australia.

"Australian oranges require cold treatment while their mangoes require heat treatment, and their shelf space is dramatically reduced after the treatments. This is stressful for us. So we really hope the agreement touched on simplifying some of these inspection and quarantine procedures, and if so, it's going to be great news for us," said Chen, whose company is a division of Legend Holdings, which owns computer giant Lenovo.

"Due to the sophisticated nature of the process, every facility used must be certified beforehand, and every one of our partners has all the necessary facilities, so sometimes the inter-firm transfer of products takes place, which poses a problem to our competitiveness."

At the moment, Joyvio's main fruits imported from Australia include mandarins, oranges, grapes and cherries.

During the event, Chen also indicated the company was looking to add South African fruit to its supply chain, including grapes and citrus.

More wine in the mix

During the event, Joyvio signed three new partnership agreements for its wine business, including two Australian companies Kilikanoon Wines and Burch Family Wines, with France's Mas Belle Eaux as the third.

“So we selected two vineyards in Australia, and guess what? They signed the agreement yesterday. It's like everything has been set up for us," Chen said.

"We know it's been an ongoing process, but nobody guessed it would come out so soon. I mean even just a month ago we heard that the process has been expedited, and I thought in two or three years we would have the agreement. Well, it's here already."

He said 14% tariffs were currently imposed by Chinese customs on Australian wine, but the FTA promised to reduce this number to zero in five years. Chen highlighted wine imports from Chile had witnessed outstanding growth now that the South American country's tariffs were down to 1.4%, and would most likely go down to zero by next year.

"Chile offers some value wine at a reasonable price, partially due to the South American country's favorable natural endowments and its labor cost, but mostly because of the low tariff imposed on wine products," he said.

"We picked Chile in the first place because we knew early on that Chile is free trade country that provides favorable conditions. And indeed, our Chilean wine sells well."

The executive added Joyvio had sold more than 500,000 bottles of Chilean wine, reaching a satisfying sales value in excess of CNY100 million (US$16 million). He hoped Australia would soon see good results in the Chinese market as well.

"Australia is such a nice place, you know. The Chinese consumers like it a lot, so we thought we'll still do it even it's with a higher price and picked two vineyards out of many.

"As soon as we made the decision, the two governments signed the free trade agreement, which was music to our ears. I'm sure we will benefit from the signing of the agreement, which brings more quality products from elsewhere in the world to China.

"Now the Chinese consumers have the chance to enjoy safe food and drinks, while Australia secured a very promising market for its growing industries. Plus, we are not that far each other either. Everything falls into place perfectly."

He said Joyvio also planned to add Spanish, Italian and South African wine to its offering in the future.

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