China is set to impose significant anti-dumping duties on Australian wine from Saturday.
The Chinese Ministry of Commerce has determined that Australian exporters have been dumping wine into its market.
‘There is dumping of imported wines originating in Australia … (and) it has been substantive,’ the ministry said in a statement on its website.
‘There is a causal relationship between dumping and material damage and it has been decided to implement temporary anti-dumping measures … in the form of a deposit from November 28.’
The ministry said the ‘margin ratio’ for the deposit would be between 107.1 per cent and 212.1 per cent on Australian wine imports of 2L containers or less.
It said the investigation had been conducted in ‘strict accordance with relevant Chinese laws and regulations and WTO (World Trade Organisation) rules’.
The $6billion Australian wine industry exports about 39 per cent of all product to China, according to Wine Australia.
This makes China the biggest destination for Australia’s wine exports and means the country spends approximately $1.16billion on Australian bottles annually.
There were already rumours in the Australian wine industry that China would introduce a tariff on Australian wine in October.
Rathbone Wines chairman Doug Rathbone said the move is ‘obviously politically motivated’ and part of China’s ongoing diplomatic spat with Australia at the time.
‘It’s pretty obvious it’s political,’ Mr Rathbone said, according to The Australian.
‘It is a bit like the barley industry, which is in a position where there is no justification for the tariffs on any commercial basis.’
Earlier this month, China turned away Australian wine bound for Shanghai with local customs seizing imports ordered by more than a dozen wine exhibitors which had been intended to show at a regional fair.
The attack against the $1.2billion wine trade came as all Chinese companies were informally instructed by the Communist Party to stop buying Australian red wine, barley, sugar, timber, coal, lobster and copper.
Major wine producer Treasury Wine Estates announced to the stockmarket it had been advised Chinese producers had asked the Chinese Ministry of Commerce to subject Australian wine to retrospective tariffs.
Treasury Wine said it would ‘continue to engage proactively’ with its Chinese customers to assess how that request impacts future import orders – but it now appears those efforts have been fruitless.
In August, Beijing accused Australian exporters of selling wine in China at an artificially low price to stamp out competition and increase market share, a practice known as ‘dumping’.
The dumping allegations came after Chinese Ambassador Cheng Jingye made economic threats against Australian back in May.
‘It is up to the people to decide. Maybe the ordinary people will say why should we drink Australian wine? Eat Australian beef?’ he told AFR.
Meanwhile, an Australian coal flotilla carrying $1.1billion in blacklisted cargo is currently trapped off the coast of China.
Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports.
The number of stranded vessels has quadrupled in the past two weeks, prompting Morrison government officials to openly question whether China is deliberately discriminating against Australian exports.
Coal earns Australia more than $53billion each year and is the country’s second biggest export after iron ore.
Last year, Australian miners shipped $10billion of metallurgic coal and $7billion of thermal coal to China.
CHINA’S WINE INTERVENTION AGAINST AUSTRALIA
- Chinese authorities say Australia is unfairly dumping wine into the market
- Temporary tariffs have been imposed, ranging from 107 to 212 per cent
- Australia now has 10 days to appeal the decision
- Wine is a $2.9 billion industry for Australia and China accounts for 37 per cent of total wine exports, by far the biggest market for Australia
- Australian ministers have not been in touch with their Chinese counterparts but officials in Canberra and Beijing are working on a solution
- Having previously taken Canada to the World Trade Organisation over wine decisions, Australia could again take that route with China