China’s Ministry of Commerce (MOFCOM) announced on Friday that it will impose anti-dumping duties from 116.2 percent to 218.4 percent on imported Australian wine. The ruling, which takes effect on Sunday, will last five years.
Industry insiders said that Australian wine in the Chinese market could fall after the ruling, as it had seen at least a reduction of 20 percent in market share since November when the preliminary anti-dumping rate of up to 212 percent was announced. Some wine agencies have also voluntarily suspended importing Australian wine in recent months and turned to alternatives such as Italian wine.
As deteriorating political relations are weighing not only wine but also barley and timber, analysts also warned that Canberra should take more concrete steps to improve ties before it is too late.
According to the ruling, dumping and subsidies have occurred in imported Australian wine, which caused substantial damage to the Chinese wine industry. The anti-dumping rate is between 116.2 percent and 218.4 percent, and the subsidies rate between 6.3 percent and 6.4 percent.
To avoid double taxation, MOFCOM will drop the anti-subsidy measures. The decision came after anti-dumping and anti-subsidy investigations on Australian wine, which started in August 2020, on the application of domestic wine producers. The investigations were conducted “strictly based on relevant Chinese laws and WTO rules,” MOFCOM said.
In November, China announced an initial finding, which preliminarily imposed anti-dumping measures, in the form of deposits, on wine imported from Australia. The deposit ranged from 107.1 to 212.1 percent.
A wine trader based in Guangzhou, capital of South China’s Guangdong Province surnamed Fang told the Global Times on Friday that he has not imported wine from Australia since December, after encountering difficulty in customs clearance.
“We now only sell stockpile Australian wine, and we plan to diversify import sources, such as buying more wine from Italy,” Fang said.
He noted that the five-year anti-dumping rate could completely wipe out Australian wine’s competitiveness in the Chinese market. “Small-scale Australian chateaus would eventually lose the Chinese market, while large Australian wine-makers such as Treasury Wine Estates would also be scrambling to survive.”
Yu Lei, chief research fellow at the research center for Pacific island countries of Liaocheng University, told the Global Times that China’s anti-dumping procedures against Australian wine are “reasonable and legitimate” as based on international standards and procedures.
He also urged Australia to be politically independent from the US, and fix its ties with China to prevent bilateral relations from further sinking.
Australian wine exports are highly dependent on the Chinese market. In earlier 2019, China’s free-trade agreement with Australia took effect, which allowed Australian wine to be imported into China without tariffs.
According to Wine Australia, Australian wine exports to the Chinese mainland were worth A$1.28 billion ($9.7 billion) in 2019, accounting for 44 percent of the country’s total wine exports.