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China targets wine from Australia in escalation of trade dispute

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China targets Australian wine in escalation of trade disputeWe’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.DismisscloseAdvertisementBy Log in, or to save articles for later.Normal text sizeLarger text sizeVery large text sizeAdvertisementAustralia is bracing for a second trade strike on the wine industry after China launched an anti-dumping investigation that puts $1.2 billion worth of exports at risk.Trade Minister Simon Birmingham said the move was "disappointing and perplexing" on Tuesday and warned a second dispute over subsidies loomed as key exports become collateral damage in Australia's deteriorating relationship with Beijing.The year-long anti-dumping investigation will examine whether Australian winemakers dumped bottles containing less than two litres in China at reduced prices over a five-year period, crowding out local producers and causing industrial damage.China is the largest market for Australia's $3 billion in annual wine exports, accounting for more than 37 per cent of exports last financial year. At $1.2 billion, China was almost three times bigger than the country's No. 2 export market, the US. Australia ranks second in terms of the average price per bottle of wine imported by China.Victorian and South Australian winemakers are particularly vulnerable. Both states send almost half their export stock to China each year, four times the level of NSW. on Tuesday morning that the Ministry of Commerce had decided to initiate the anti-dumping investigation.Senator Birmingham said the move was unjustified."Australian wine is not sold at below-market prices and exports are not subsidised. Australia will engage fully with the Chinese processes to strongly argue the case that there are no grounds to uphold the claims being made," Senator Birmingham said on Tuesday.Advertisement"This is a very disappointing and perplexing development."Senator Birmingham said the investigation poses "a threat to all producers who export".Chinese authorities notified the Australian government of the decision ahead of the public announcement. Senator Birmingham said China was also considering launching a countervailing duties investigation into whether Australian wine exports are receiving and benefiting from government subsidies.The relationship between Australia and its largest trading partner has grown increasingly tense this year over the coronavirus, Beijing's crackdown on Hong Kong, territorial disputes in the South China Sea and the rejection of China's flagship 5G provider, Huawei, by Western mobile networks.China's ambassador to Australia, Cheng Jingye, that beef, students, tourists and wine could be vulnerable to trade strikes, leading the Australian government to accuse him of economic coercion. All four sectors have now been hit.Despite particular industries being targeted, overall trade with China is now almost 4 per cent higher than it was this time last year, with in the iron ore, grain and wool sectors.Shares in Treasury Wine dived 14.3 per cent to $10.58 after dropping as much as 20 per cent during the session.China's investigation presents a significant challenge to Treasury Wine's new chief executive, Tim Ford, who has been in the role for less than two months."This decision matters deeply to our business and the entire wine industry, both in Australia and China," he said. "We have played a long-term positive role in growing the wine category in China, and we will continue to take a leadership role as this issue plays out."Tony Battaglene, chief executive of industry group Australian Grape and Wine, said the Australian industry would co-operate with the investigation, but believed it did not have a case to answer. "We know it’s come around because the China industry has been struggling," he said."China actually produces probably more wine grapes than we do in Australia. It’s quite a large domestically focused industry and it’s been around for quite a long time," he said.The vast majority of the value of Australian wine exports to China is through 750ml bottles, a size that is subject to the Chinese investigation.Asked if he believed the investigation was political payback by Chinese authorities against Australia, Mr Battaglene said the investigation was in response to concerns raised by the Chinese wine industry."It’s definitely come from industry, we know that. Whether the extent and degree of it has some political overtones, that’s not for me to judge," he said.A concise wrap of the day on the markets, breaking business news and expert opinion delivered to your inbox each afternoon. Sign up for and .Log in, or to save articles for later. is the North Asia correspondent for The Sydney Morning Herald and The Age. – Darren is the mining and agribusiness reporter for The Age and The Sydney Morning Herald.Advertisement

China targets Australian wine in escalation of trade disputeWe’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.DismisscloseAdvertisementBy Log in, or to save articles for later.Normal text sizeLarger text sizeVery large text sizeAdvertisementAustralia is bracing for a second trade strike on the wine industry after China launched an anti-dumping investigation that puts $1.2 billion worth of exports at risk.Trade Minister Simon Birmingham said the move was "disappointing and perplexing" on Tuesday and warned a second dispute over subsidies...

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Darren Gray

Eryk Bagshaw

The Sydney Morning Herald - Australia's leading news source. Independent. Always.

China targets wine from Australia in escalation of trade dispute

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