China adds anti-subsidy duties to Australian wine

After imposing tariffs of 107.1%-212.1% on Australian wine last month, the Chinese Ministry of Commerce said it would levy additional duties of between 6.3-6.4% from 11 December.

In its announcement of the temporary anti-subsidy duties, China claimed that its domestic wine industry has suffered “substantial damages” as a result of alleged subsidies given to imported Australian wine, and that there was “a casual relationship between subsidies and substantive damages”.

The duties were announced as part of preliminary ruling on China’s countervailing investigation. A preliminary ruling on the concurrent anti-dumping investigation was given last month and resulted in the imposition of tariffs of between 107.1% and 212.1% on Australian wine.

The additional levies will come into force tomorrow and are expected to last throughout China’s investigation, the results of which are expected to be reported no earlier than October 2021, according to a timeline published by Australian Grape & Wine.

CEO of the organisation, Tony Battaglene, told ABC, that the additional duties were “unlikely” to have any practical implication given the extent of the current tariffs.

In a statement given to the drinks business earlier this week, before China’s announcement, he said there was “no evidence” to support the dumping claims and “no evidence to support that Australian wine exports have caused injury to the Chinese domestic wine industry”.

He added: “However, we are not confident that the Chinese government will reverse this decision that appears to any reasonable observer to be politically and not factually motivated.”

China’s countervailing and anti-dumping investigation was launched back in August. 31 Australian wine exporters registered to take part in the enquiry, and were duly issued with a questionnaire for completion in September.

On 30 September, the Chinese Ministry of Commerce said it would take a sampling approach to the investigation, naming four wine companies (Treasury Wine Estates, Casella Wines, Australia Swan Vintage and Pernod Ricard Winemakers) that it would sample.

It has now been reported that Treasury Wine Estates, Casella Wines and Swan Vintage will receive anti-subsidy duties of 6.3%, while Pernod Ricard will incur a rate of 6.4%.

Treasury announced last month that it was reallocating its Penfolds Bin and Icon ranges away from China as part of a series of measures to mitigate the impact of the anti-dumping tariffs.

Battaglene told db that Treasury was not alone, and that Australian wine producers were now “unloading and trans-shipping containers that were on the way to China, and seeking new markets”.

It follows similar measures taken by China against Australian barley, red meat, lobsters, coal, cotton and timber.