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Oncore Wealth: China and Australia Free Trade – What it means for our markets

Published 16th December 2014

A noteworthy mention goes to the historic Free Trade Agreement Australia has made with China recently. The Australian agricultural industry is a key beneficiary of the of the Free Trade Agreement (FTA) with China, which will result in the elimination of tariffs over the medium to longer term. Here are some key messages from our team of analysts and our investment committee on how to take advantage of this historic decision. 

A summary of the tariff removals and time frame:

Dairy – Removal of all tariffs of up to 20 per cent, in four to 11 years
Beef – Removal of all tariffs of 12 to 25 per cent, over nine years
Wine – Removal of all tariffs of 14 to 20 per cent, over four years
Horticulture – Removal of all tariffs up to 30 per cent, in four years
Live animal exports – Removal of tariffs of 10 per cent in four years
Wool – Australia-only duty free quota for wool.

The listed companies that are key beneficiaries of the China FTA include:

Beef/live exports – Australian Agricultural Company (AAC), Elders (ELD) and RuralCo (RHL)
Dairy – Bega Cheese (BGA), Warrnambool Cheese and Butter (WCB), Fonterra Shareholders’ Fund (FSF), Bellamy’s Australia (BAL), Freedom Foods (FNP), and Elders (ELD) supply inputs to the dairy industry and exports dairy heifers to China
Wine – Treasury Wine Estates (TWE) and Australian Vintage (AVG)
Horticulture (nuts) – Select Harvests (SHV) and Webster (WBA).

Contact the Oncore Wealth Solutions team on 1300 654 484 to discuss the investment options available to you.