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China Shuts Australia Out For Five Years

By Sunday 28 March 2021No Comments

Australian winemakers have been shut out of the Chinese markets for five years after China’s Ministry of Commerce (MOFCOM) announced that it will impose anti-dumping duties from 116.2 percent to 218.4 percent.

The ruling will last five years and follows the introduction of temporary anti-dumping and anti-subsidies tariffs announced in November.

According to the ruling, dumping and subsidies “have occurred” in imported Australian wine which “caused substantial damage” to the Chinese wine industry.

The anti-dumping rate is between 116.2 percent and 218.4 percent, and the subsidies rate between 6.3 percent and 6.4 percent.

MOFCOM says it will drop the anti-subsidy measures to avoid “double taxation”.

In a story about the tariffs in the Global Times, the mouthpiece for the People’s Republic of China, Yu Lei, chief research fellow at the research centre for Pacific Island countries of Liaocheng University, said China’s anti-dumping procedures against Australian wine were “reasonable and legitimate” as based on international standards and procedures.

He also urged Australia to be “politically independent from the US” – and fix its ties with China to prevent bilaterial relations from “further sinking”.

A wine trader based in Guangzhou told the Global Times he has not imported wine from Australia since December, after encountering difficulity in customs clearance.

“We now only sell stockpile Australian wine, and we plan to diversify import sources, such as buying more wine from Italy,” he said.

The Global Times said, “As deteriorating political relations are weighing not only wine but also barley and timber, analysts also warned that Canberra should take more concrete steps to improve ties before it is too late.”

The fact that the People’s Republic of China continues to bring up politics in commentary about the penalty to Australian winemakers, shows once and for all that this ban is not about subsidies and anti-dumping – it is all about politics.

The ban includes all bottled still wines from Australia. There is no mention of bulk wine but Australian producers of bulk wine have been having trouble clearing customs in China.

Tony Battaglene, chief executive of Australian Grape & Wine said, “While it’s disappointing, the industry is not surprised by today’s decision.

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

“Our focus now is two-fold. Firstly, we’re working with industry and the Australian Government to assess options available to us within the Chinese system, and internationally.

“And secondly, we’re focusing on growing demand for Australian wine in other markets across Asia, Europe, US and the UK.”

China became the Australian wine industry’s first billion-dollar market.

Australian wine exports reached a record $3.1 billion in the 12 months to the end of October 2020 before crashing to $2.89 billion by the end of December because of the China tariffs – a loss of $210 million in two months.

Meanwhile the search for new markets for Australian wine goes on – a difficult task with no international travel for the foreseeable future.

China, they shot us down bang bang!

Australian wine exports reach 13-year high of $2.998 billion.

Photo by Pascal Bernardon on Unsplash

 

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