China launches anti-dumping investigation into Australian wine

The Chinese government has announced an investigation into Australian wine exports to China, on the grounds of alleged ‘wine dumping’, as relations between the two countries sour.

This makes wine the third agricultural export after beef and barley to be targeted by China this year, with China also advising its citizens not to travel to Australia for either work or holiday.

Announcing its investigation today (18 August), China’s Ministry of Commerce said it was going to investigate whether Australian wine companies had engaged in “dumping” wine on the Chinese market at a deliberately low price in order to claim a larger market share, to the detriment of locally produced wines.

The investigation has been launched at the apparent request of the Chinese wine industry. It is expected to conclude by August next year.

There has also been a suggestion of launching a second investigation to see if Australian wine exports were benefitting from government subsidies.

The implications and potential repercussions of this could have enormous consequences for the Australian wine industry which has been heavily invested in the Chinese market over the last few years. As reported by various Australian media outlets, shares in Treasury Wine Estates plunged almost 15% after the announcement.

The Chinese market is now worth over AU$1.2 billion, almost half the total value of Australian wine exports, while volumes exported stand at 14.2 million, the third highest total.

Australian trade minister, Simon Birmingham, said in a press conference that this was a “very disappointing and perplexing development. Australian wine is highly sought after in China because of its quality. Australian wine is not sold below market prices and exports are not subsidised.”

China and Australia enjoyed something of a fairytale courtship in 2017/2018, concluding with the granting of zero import tariffs for Australian wines in China in January 2019.

Since then however the relationship between the two countries has been on a downward slide. Fears of Chinese interference in Australian politics, cyber attacks from China and the Australian federal government’s decision to lock Chinese telecoms company Huawei out of the country’s 5G network (due to fears of security related to Australia’s ‘Five Eyes’ intelligence sharing commitments with the US, UK, Canada and New Zealand), have all proved antagonisms; s have Australia’s vocal critics of China’s crackdown in Hong Kong and its increasingly militarised stance in the South China Sea.