EU and Australia Finalize Free Trade Deal Reshaping Wine Exports

The European Union and Australia have reached a free trade agreement that is set to reshape the wine trade between the two regions. According to EU data, European wine exports to Australia in 2024/2025 exceeded €300 million, with Italian wines accounting for €79.9 million in 2025. Although Australia is a distant market and often overlooked, it has become increasingly important for European producers, especially given current global uncertainties.

The European Committee of Wine Companies (Ceev) has welcomed the conclusion of negotiations on the EU-Australia free trade agreement. The European Commission estimates that the deal will reduce tariffs on EU exports to Australia by 99%, improve access to critical raw materials, and simplify trade procedures. The EU-Australia trade channel currently moves €89.2 billion in goods and services annually and supports 460,000 jobs across Europe. The agreement is expected to save European exporters €1 billion per year, increase exports by 33% annually over the next decade, and add €4 billion to the EU’s GDP by 2030.

For agriculture, the agreement will open new export opportunities as Australia eliminates tariffs on key products such as cheese, wine, chocolate, biscuits, and bread. For wine specifically, the EU expects to save €16 million in tariffs. The deal also modernizes the bilateral wine agreement, providing additional protection for more than 1,600 EU wine geographical indications (GIs), including about 50 new ones. One significant outcome is the protection of the term “Prosecco.” Australian producers have used “Prosecco” as a varietal name for sparkling wines, but under the new agreement, this practice will be phased out for exported wines and regulated more clearly for domestic sales to avoid consumer confusion.

Marzia Varvaglione, president of Ceev, stated that in a time of geopolitical uncertainty and rising production costs, this agreement offers a real opportunity to diversify exports and strengthen the global competitiveness of EU wine companies. She noted that while the final text still needs detailed review, the outcome is already positive for the European wine sector. Australia is currently the eleventh largest export market for EU wines, with more than half of those exports being sparkling wines—a sign of strong Australian demand for European “bubbles.”

The agreement will immediately eliminate the 5% import tariff on EU wines and modernize bilateral recognition of international winemaking practices. It also strengthens protection for geographical indications. Ignacio Sánchez Recarte, Secretary General of Ceev, explained that protecting wine GIs was one of the most sensitive parts of negotiations. The gradual elimination of “Prosecco” from Australian exports and clearer labeling rules for domestic use represent a significant achievement given the complexity of discussions.

Australian industry groups have also responded positively to key elements of the deal. Australian Grape & Wine, which represents grape growers and winemakers in Australia, welcomed the removal of tariffs on Australian wine exports to EU member states. According to CEO Lee McLean, this will save exporters an estimated AUD14.5 million per year and improve long-term competitiveness in Europe—Australia’s main export region by volume. In 2025 alone, 245 Australian exporters shipped 76 million liters of wine worth AUD143 million to EU markets.

However, there are significant implications for Australian producers who export Prosecco. Under the agreement, they will retain the right to use “Prosecco” as a grape variety name within Australia’s domestic market—a market valued at around AUD200 million annually—but will no longer be able to export wines labeled as Prosecco after a ten-year transition period. Australian Grape & Wine maintains that Prosecco is a grape variety and argues that restricting its use is a protectionist measure favoring EU producers. The organization says it will work with government authorities to support affected exporters during this transition.

The European Commission notes that the EU has a positive agri-food trade balance with Australia worth €2.3 billion in 2024. The agreement takes into account sensitive agricultural sectors such as beef, sheep meat, sugar, certain dairy products, and rice by allowing only limited duty-free or reduced-tariff imports from Australia through carefully calibrated quotas. There is also a bilateral safeguard mechanism allowing rapid protective measures if imports from Australia unexpectedly surge or cause harm to European markets.

European Commission President Ursula von der Leyen commented that while geographically distant, the EU and Australia are closely aligned in their approach to global issues. She said these new partnerships on security and trade are building lasting structures based on trust and cooperation.

EU Agriculture Commissioner Christophe Hansen emphasized that this agreement guarantees full duty-free access for EU producers to the Australian market while protecting sensitive sectors through quotas and safeguards. He highlighted that in 2025, 61% of EU agri-food exports and 57% of imports were with partners with whom the EU has trade agreements.

Draft texts from negotiations will soon be published before final approval by both sides’ legislative bodies. If ratified by both the European Parliament and Council as well as by Australia’s government, the agreement could enter into force soon after—a process that began in 2018 and now appears close to completion.