Focus on new wine markets as China extends tariffs on wine imports

29 March, 2021 by Andy Young

Australia’s wine and grape businesses are focusing on driving growth in their developing markets after China’s Ministry of Commerce (Mofcom) said it will impose anti-dumping measures on some Australian wine imports for five years.

According to a statement released on Friday importers bringing in wines related to the anti-dumping activities ruled by China will need to pay tax to China’s customs authority. The taxes, which took effect yesterday, will range from 116.2 per cent to 218.4 per cent.

Advertisement

Mofcom released its final determinations on investigations into allegations of dumping of Australian wines in China and trade distorting subsidies (countervailing duties), applying the duties on imports of all bottled, still wines from Australia.

Mofcom said its investigation found “dumping and subsidies on imported wines” from Australia, which meant China’s local wine industry had “suffered material damage”.

Tony Battaglene, Chief Executive of Australian Grape & Wine, said the industry had been preparing for this outcome.

“While it’s disappointing, the industry is not surprised by [Friday’s] decision. We continue to reject the allegations levelled against Australian Grape & Wine members and have approached both investigations as collaboratively and transparently as possible.”

He added: “We have worked closely with the Australian Government throughout this process and I want to thank Ministers for the work they have done in what has been a very challenging period for everyone.

“The Australian Government’s $72.7 million investment to help agribusinesses expand their export markets is a great first step to getting on with the job of finding new markets for Australian wine.

“It’s going to take collaboration, hard work and commitment, but if we work together we’re confident that we can drive growth in market access and sales in a range of markets in the coming years.”

Federal Trade Minister Dan Tehan said the Government was considering its response to the tariffs, including taking China to the World Trade Organisation as it was now “basically impossible” for Australian wine to be competitive in China.

“This decision which has been taken by the Chinese government is extremely disappointing and completely unjustifiable,” Tehan said.

“We will be looking at next steps, and those next steps will include looking at taking this matter to the World Trade Organisation.”

Tehan also backed Australia’s wine businesses to succeed in their pursuit of growth in other markets. “Chinese consumers have shown quite clearly a great liking for Australian wine, and we’re very confident that consumers right around the world will also want to appreciate the great product that Australian winemakers and Australian grape growers produce,” he said.

From 1 October 2019 through to 30 September 2020 Australian wine exports to China totalled $1.26bn, during that time Australian exporters shipped wine to 117 destinations, with the most significant growth coming in exports to Europe, up 16 per cent to $678 million and over-taking North America in value terms for the first time since 2011.

China initially imposed temporary tariffs on Australian wine at the end of November following its initial investigation into alleged wine dumping, but warned at that time they could be extended.

Prime Minister Scott Morrison rejected the tariffs saying they were a retaliation for Australians “standing up for our values,” adding, “that’s not OK.”