Australia threatens WTO action after China’s wine ruling

The Australian government has said it is considering raising the matter of China’s punitive wine tariffs with the World Trade Organization.

The Chinese Ministry of Commerce (MOFCOM) announced last week that it would be imposing tariffs of between 116% and 218% on imports of Australian wine for the next five years.

In a bulletin posted on 26 March, MOFCOM said it had reached a final ruling as part of its investigations into alleged dumping of Australian wine, a practice where the sale price is lowered to unfairly gain market share.

Having begun its investigations in August last year, MOFCOM has concluded: “There was dumping of imported wines originating in Australia, the domestic wine industry was materially damaged, and there was a causal relationship between dumping and material damage.”

Effective from 28 March, tariffs of between 116% and 218% on Australian wine packaged in containers of two litres or less will now be in force.

Australia’s trade minister Dan Tehan has condemned the ruling.

Speaking during a press conference at the weekend, he said: “This decision which has been taken by the Chinese government is extremely disappointing and completely unjustifiable. I’ve spoken to the Australian wine industry… and we will be looking at next steps, and those next steps will include looking at taking this matter to the World Trade Organization.

“The Australian wine industry is also determined to work very closely with the Australian government to make sure that we seek to explore other markets. Tariffs of 116 to 218 per cent mean that it’s basically impossible for Australian wine to be competitive in the Chinese market.”

Tony Battaglene, chief executive of industry body Australian Grape & Wine, said he was disappointed but “not surprised” by the decision.

“We continue to reject the allegations levelled against Australian Grape & Wine members and have approached both investigations as collaboratively and transparently as possible,” he said.

He said the industry was now focused on growing demand for Australian wine in other areas across Asia, Europe, US, and the UK.

He added: “The Australian government’s AU$72.7 million investment to help agribusinesses expand their export markets is a great first step to getting on with the job of finding new markets for Australian wine. It’s going to take collaboration, hard work and commitment, but if we work together we’re confident that we can drive growth in market access and sales in a range of markets in the coming years.”

Australia has already called on the WTO to investigate China’s handling of imports of Australian barley, which is subject to an 80.5% tariff.

Other Australian goods that have also been affected include coal, timber, beef and lobster.

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