THE wine industry has been hit hard with the Chinese Government announcing the introduction of temporary tariffs on Australian bottled wine imports.
Tariffs range from 107 to 212 per cent and apply to wine in containers of two litres or less.
They follow China’s investigation into allegations Australia is ‘dumping’ wine into its country, at an unfair advantage to their domestic producers and sellers.
While the investigation is not expected to be completed until next year, the Chinese Ministry of Commerce (MOFCOM) announced (as of last Saturday) importers of Australian wine entering China will need to pay the temporary "anti-dumping security deposits".
Among the wineries singled out were Australia’s biggest wine company Treasury Wine Estates (169.3 per cent), which owns Penfolds and Wolf Blass; Casella Wines (160.2 per cent), which owns Peter Lehman Barossa; Dorrien Estate (160.6 per cent); Australian Swan Vintage (107.1) and Pernod Ricard Winemakers Pty Ltd (160.6 per cent).
All others, who did not register as part of the MOFCOM investigation, were set with 212.1 percent.
On Monday, Treasury Wine Estates said part of its ‘response plan’ would include pulling its Penfolds brand out of China.
It will be reallocated to “other key luxury growth markets” where there is unsatisfied demand, including Australia, the US, Europe, and Asian markets outside of China.
In a statement to its members the Barossa Grape and Wine Association (BGWA) said it will continue to work with its partners in both Australian and Chinese markets to address concerns.
“BGWA acknowledges there are potentially serious ramifications for industry and are equally disappointed in this decision,” it said.
“In the absence of international travel in 2020, Barossa's network of advocates and ambassadors have been continuing to promote our wines globally.
“BGWA are developing new consumer creation strategies to increase the depth and opportunity for our region's wines.”
Australian Grape and Wine (AGW) said the restriction on exports to China will hurt the wine sectors of both countries, and will be particularly disappointing for the millions of Chinese consumers who enjoy Australian wine, and the Chinese distributors who have built relationships with Australian wine businesses.
“These are preliminary tariffs, and both the anti-dumping and countervailing duties investigations are ongoing” AGW chief executive Tony Battaglene said.
“We continue to stand firm that Australian exporters are not dumping wines in the Chinese market, nor have they received subsidies that have had a negative impact on the Chinese wine industry.”
The tariffs follow months of trade uncertainty and souring relations between Australia and China, and has delivered another blow to an industry already suffering from the effects of the COVID-19 pandemic.
Federal trade minister Simon Birmingham said this is a distressing time for the hundreds of Australian wine producers.
“These are very significant impositions on Australian wine,” he said.
“…It is of great concern that China has taken this action, and it is an action that comes on top of an accumulation of other actions during the course of this year in particular.
“Australia defends to the hilt, our winemakers, their integrity, and the commercial market-based proposition and environment in which they operate.”
The tariffs will not only hurt those businesses exporting wine to China – the whole industry is expected to suffer as cancelled export orders flood the domestic market and potentially drive down prices.
