An anti-dumping probe into Australian wine by China’s Ministry of Commerce risks escalating a growing trade dispute between the two countries.
The move, which will examine whether Aussie wines have been suffocating China’s local wine industry, could destabilise an Australian export industry worth $1 billion since last year and which may undergo a revenue drop of 5 per cent by the end of the year due to slow growth and the effect of the Covid-19 pandemic.
Government ministers were quick to rebuke China’s move with Trade Minister Simon Birmingham describing the probe as “a very disappointing and perplexing development”.
“Australian wine is not sold at below market prices and exports are not subsidised,” Senator Birmingham said. “Australia will engage fully with the Chinese process to strongly argue the case that there are no grounds to uphold the claims being made.”
The investigation follows the establishment of recent barriers to Sino-Australian trade that include an 80-per-cent tariff on barley, in response to a deterioration in diplomatic relations over issues regarding Hong Kong civil liberties, Chinese investment in Australia, the origins of the coronavirus and telecommunications technologies developed by Huawei.
“This investigation is a real threat to Australian wine producers, who receive over a third of their total export revenue from Chinese buyers,” said IbisWorld senior industry analyst, Matthew Reeves.
Treasury Wine Estates, one of the largest Australian exporters of wine to China with brands including Penfolds, Wolf Blass and Wynns, said it would co-operate with any requests it receives for information from Chinese or Australian authorities.
“TWE has had a long and respectful relationship with China over many years through its team, partners, customers and consumers,” the company said in a statement.
“As an importer of high-quality, premium Australian wine, including brands such as Penfolds, TWE remains committed to China as a priority market and will continue to invest in its Chinese business and its relationships with customers and consumers.”
The company says it will continue to focus on building premium and luxury brands, investing in the local operating model and team in China, and working with partners to enhance the wine category in the market.