On July 1, the China-Serbia Free Trade Agreement (FTA) officially came into effect, setting the stage for zero tariffs on Serbian wine within five years.

According to China’s Ministry of Commerce, the current import tariff on small-packaged wines and sparkling wines made from fresh grapes is 11.2%. Typically, the tariff rate for these products in China is 14%.

With the FTA, both countries will gradually eliminate tariffs on 90% of taxable goods and tariffs on Serbian wine in particular will decrease by 20% annually, reaching zero in five years.

It is important to note that even with zero tariffs, China still imposes a 13% value-added tax and a 10% consumption tax on wine.

The FTA was signed on October 17, 2023. Public information shows that China has signed 22 FTAs with 29 countries and regions, including notable wine-producing countries such as Australia, New Zealand, Chile, and Georgia.

Serbia, located in southeastern Europe, is a landlocked country in the central Balkans, covering an area of 88,000 square kilometers.

With a winemaking history spanning thousands of years, Serbia’s viticulture dates back to Roman times. From the 8th to the 14th century, Serbian rulers emphasized viticulture and the wine industry, shaping the region’s wine culture. Today, Serbia boasts nearly 70,000 hectares of vineyards. In terms of grape varieties, Serbia cultivates many international varieties such as Chardonnay, Sauvignon Blanc, Riesling, Merlot, and Cabernet Sauvignon, as well as indigenous varieties like Prokupac.

According to the Serbian newspaper Danas, Serbia’s wine exports grew by 25% year-on-year in 2022. The country produces about 160,000 tons of grapes annually, equivalent to approximately 30 million liters of wine.

Although Serbia’s winemaking industry has gained recognition over the past fifteen years, it is still in its nascent stage, with an estimated capacity of 70 million liters of wine per year. Serbia’s grape-growing area is 19,900 hectares, which has been increasing in recent years. Agricultural census results show that Serbia has around 80,000 producers engaged in grape production, with 47,000 registered with the Ministry of Agriculture. In 2022, there were over 450 registered producers engaged in commercial wine production. The increase in consumer interest and favorable export conditions have boosted the number of winemakers and attracted more new small wineries to the market.

However, Serbia is not yet a mainstream wine-producing country. In the International Organisation of Vine and Wine (OIV) 2023 list of major wine producers, Serbia is not mentioned.

Serbian wine is also not yet widely accepted in the Chinese market. Customs data shows that from January to May 2024, China imported 73,900 liters of Serbian wine, amounting to USD 335,600. This ranked Serbia 20th biggest wine supplier to China by country of origin, ahead of Switzerland but behind Montenegro.

This year, Serbia is stepping its promotional efforts to raise its profile among Chinese consumers leveraging its FTA agreement. This May at the Serbian Specialty Products Launch Event held in Shanghai, Chinese and Serbian businesses, including leading Chinese e-commerce platform JD.com, signed agreements to expand cooperation, including wine.

In an interview with China’s state media CCTV News this May, Serbian President Aleksandar Vu?i? also drummed up Serbian wine, “Our wines are not cheap, but they are not as expensive as those from France, Italy, and some other countries. They offer good value for money. I would like to recommend some very good wines.”

Nevertheless, from January to May this year, China’s imports of Serbian wine decreased by 7.82% in volume and 46.02% in value compared to the same period last year. For Serbian wine to truly capture the hearts of Chinese wine merchants and consumers, it needs unique selling points and persistent promotion.