Aussie wine exports under threat as China imposes harsh tariff regime

Aussie wine exports under threat as China imposes harsh tariff regime

More than a third of Australia's wine exports are under threat after China imposed harsh tariffs on wine imports of two litres or less.

The move is the latest in the escalating cold war between China and Australia and follows a Chinese investigation that found Australian producers guilty of flooding its market with cheap wine.

As such, preliminary tariffs of between 107.1 per cent and 212.1 per cent have been imposed on Australian wine.

The decision had immediate impact on Australia's largest wine group, Treasury Wine Estates (ASX: TWE), leading to a slump of more than 11 per cent in its shares today ahead of a trading halt requested by the company. Treasury is currently preparing a response to today's developments.

The decision impacts more than $1 billion in wine exports to China, which accounted for more than a third of Australia's wine exports last financial year.

The Federal Government was quick to reject China's claims of any wrongdoing.

"The fact is Australia produces amongst the least subsidised product in the world and provides the second-lowest level of farm subsidies in the OECD," says David Littelproud, the Minister for Agriculture.

"Today's decision is a seriously concerning development and one which Australia will be vigorously fighting against.

"The Australian Government categorically rejects any allegation that our wine producers are dumping product into China, and we continue to believe there is no basis or any evidence for these claims."

Littleproud says the government will continue working with the wine industry and Chinese authorities as part of the ongoing dumping investigation. He has not indicated whether Chinese authorities are taking his phone calls at the moment.

"But we will of course consider all of our options moving forward," Littleproud says.

"Australian wine is hugely popular both in China and across the globe due to its high quality and we are confident that a full and thorough investigation will confirm this."

The simmering tensions with China flared up in May after Australia led the call for a full investigation into the source of COVID-19. 

China threatened to boycott Australian beef, wine and international student markets. That list of products has expanded since to include coal, barley, copper ore and concentrate, sugar, timber and lobsters.

China's investigation into alleged dumping of cheap wine into its domestic market in 2019 was announced in August this year and was expected to take 12 months to complete.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Advertisement

Related Stories

Crown to cough up $12.5m towards Bergin Inquiry

Crown to cough up $12.5m towards Bergin Inquiry

Crown Resorts (ASX: CWN) has revealed it will pay $12 million tow...

$65m valuation gives Melbourne's Deliciou a plant-based protein kick for Whole Foods Market roll-out

$65m valuation gives Melbourne's Deliciou a plant-based protein kick for Whole Foods Market roll-out

When Kjetil Hansen appeared on Shark Tank in 2017, his $1.2 milli...

Treasury Wines shrugs off China woes as earnings recover

Treasury Wines shrugs off China woes as earnings recover

Treasury Wines (ASX: TWE) has shrugged off its China woes with a ...

Australia orders 25 million COVID-19 vaccine doses from Moderna

Australia orders 25 million COVID-19 vaccine doses from Moderna

Biotechnology company Moderna (Nasdaq: MRNA) has entered into a n...