China Probes into Some Wine Imports from Australia

Economic News: On Tuesday, the Ministry of Commerce in China launched an anti-dumping investigation into some imported wines from Australia.

In a statement, Simon Birmingham said that Chinese authorities had advised Australia that they were considering launching a countervailing duties investigation.

Simon Birmingham is Australia’s Federal Trade Minister.

He expressed his disappointment, saying that Australian wine did not sell below-market prices and did not subsidize its exports.

This Chinese announcement comes amid growing geopolitical tensions between the two countries.

The Chinese investigation targets wine containers holding 2 liters or less. A typical wine bottle is about 0.75 liters.

According to Wine Australia, China is Australia’s top export market and the largest destination for its wine exports by value.

The anti-dumping investigation comes after the China Alcoholic Drinks Association requested the probe in early July. The probe will thus look into potential dumping in 2019 and industry damages between 2015 and 2019.

The Chinese Ministry of Commerce made more information available in a separate online statement on Tuesday.

According to the ministry, the investigation will last one year – until August 18, 2021. But it can extend until February 18, 2022, under special circumstances.

According to 12 months of data through May from Global Trade Atlas, Australia enjoyed the largest share of imports, at 37% of China’s imported wine. Wine Australia also cited the same figure in its August 4 report.

The report also said France comes second, at 27%, and Chile comes third, at 13%.

Shares of wine giant, the Treasury Wine Estates dropped.

According to a statement on the Australian Stock Exchange website, the trading shares of Australia’s wine giant dropped briefly, pending an announcement.

The company’s shares dropped by more than 13% in Tuesday trading.

The wine company later said in a statement, through the Australian Stock Exchange, that they would cooperate with Chinese and Australian authorities.

It added that it would focus on building its luxury and premium brands while growing its contribution to China.

However, it wasn’t immediately clear whether the wine giant was part of the Chinese investigation.

According to Wine Australia’s report, the country exported 62% of its wine produced in 12 months through to the end of June.

Mainland China was Australia’s largest market by value, with exports rising by 0.7% to $790 million. The report noted growth in exports at higher prices and a decline at the lower end of the market.

Wine Australia said the national industry association, Australia Grape and Wine, was well placed to respond to the investigation, and exporting companies would cooperate fully.

The association added that the Australian industry welcomes opportunities to work with the Chinese industry and government to enhance technical cooperation and long-lasting relationships.