China drags wine into EU trade war

China’s wine industry has called on the government to investigate whether EU subsidies are putting its domestic products at a competitive disadvantage.

The China Alcoholic Drinks Industry, which represents the country’s wineries, is concerned that European winemakers are being subsidised to flood China with poor quality wines.

In an interview with China Daily, Wang Zuming, secretary general of the CADA’s wine sub-branch, said: “We have noticed a clear intention to sell European wines in the Chinese market at below cost price.”

The complaint is being viewed as a reaction to moves by the EU to launch a similar probe into China’s solar panel exports. Rival firms in Europe, China’s largest market for solar panels, have complained that the country is selling these products at a loss. The US began its own investigation against China’s solar industry nine months ago.

In addition to this wider trade friction, China’s wineries, which currently account for 75% of the country’s wine market, are facing increased pressures from declining revenues and quality concerns.

As reported in the drinks business last week, recent figures from Chinese customs authorities show that the country imported 200 million litres of wine in the first six months of 2012, a rise of 12% on 2011. Analysts have predicted that these imported brands could grow to represent 50% of China’s wine market.