China launches second Australian wine investigation

31 August, 2020 by Andy Young

Concerns of a developing trade dispute between China and Australia have grown again after the Chinese Ministry of Commerce (Mofcom) announced it was launching a second investigation into Australian wines.

The new investigation will probe countervailing duties and whether these need to be levied on Australian wines for alleged subsidies they enjoy. The move comes after a formal complaint by the Wine Industry of China last month.

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Mofcom will probe whether Australia’s government offered up to 40 wine subsidy programs, which enabled producers to offer cheap Australian wines in China.

This is separate to the anti-dumping investigation Mofcom announced two weeks ago, which is looking into allegations that Australian wines are being sold in China cheaper than they are available here.

After the investigation was announced, Australian Grape & Wine said: “Australian Grape & Wine acknowledges the Chinese Ministry of Commerce has now formally launched a countervailing duties investigation on Australian wine in China.

“This was flagged on 18 August 2020, at the time Mofcom announced it would be launching an anti-dumping investigation on Australian wine in China.

“The Australian grape and wine sector is well placed to respond to this investigation. Australian Grape & Wine will collaborate with wine businesses and the Australian Government to ensure we cooperate fully throughout the investigation process.

“China is an important market for Australian wine and our wine is in demand from Chinese consumers. Australia has a large number of exporters with close cultural ties to China.

“The Australian industry welcomes the opportunity to build on these ties and work with the Chinese industry and government to further technical cooperation and develop lasting relationships.”

Both investigations will focus on Australian wines in containers of two litres or less and according to the South China Morning Post, the countervailing investigation could result in duties being imposed on imported Australian wine to offset the alleged subsidies offered to Australian producers.

These include the wine equalisation tax, export and regional wine package support and farm management projects. Mofcom will also look at state-based energy, employment and irrigation projects in the ACT, NSW, Tasmania and Victoria.

Trade Minister Simon Birmingham said: “We strongly refute claims that initiatives like the Murray-Darling Economic Development Program or programs that support research and development equate to a subsidy of our wine exports.

“The government will work with our internationally-renowned wine industry to mount the strongest possible case against these claims.”

The countervailing investigation will last one year, but can be extended to the end of February 2022 under special circumstances.