Australia China Wine

China names four Australian companies for further investigation in dumping probe

Three biggest Australian wine exporters to China have been selected for China’s further investigation of Australia’s alleged dumping and subsidies, after 31 companies have completed sample questionnaires.

Four biggest Australian wine exporters to China have been selected for China’s further investigation of Australia’s alleged dumping and subsidies, after 31 companies have completed sample questionnaires.

Four of Australia’s leading wine exporters to China, namely Treasury Wine Estates, Casella, Chinese-owned Australian Swan Vintage, and Pernod Ricard have been selected to fill in an in-depth questionnaire after completing sample questionnaires as part of China’s widening investigation into possible dumping and subsidies.  

When the anti-dumping probe was first announced on August 18, ten Australian wine companies were singled out. They are Treasury Wine Estates, owner of Penfolds and Wolf Blass, Casella, parent company of Yellow Tail, Australian Vintage, Yalumba, South Australian Wine Group, The Wine Company, Truffle & Wine, Wingara Wine Group and Stoney Rise Wine company.

On August 31, China followed up and announced a second investigation of subsidies, further inflaming wine trade relations between the two countries.

Later, it’s reported that three of the companies were removed from the list as they don’t export to China. In total, 31 wine companies responded to Chinese government’s call and voluntarily registered to be part of the investigation, hoping that by proving they did not engage in dumping activities they could be spared of punitive taxes.

The four companies are therefore selected from the 31 companies and have 37 days to complete the in-depth questionnaire.

The selection of Australian Swan Vintage, creator of Auswan Creek, also squashed a rumor that the investigation might spare Chinese-owned or partially Chinese owned-wineries.

Founded by Chinese-Australian businessman Li Wei, the company’s flagship wine brand Auswan Creek was launched in China in 2012 and even debuted an Ambassador Shiraz in honor of former Australian ambassador to China, Geoff Raby, back when relations were rosy.

Punitive tax on October 18?

There are rumors that China will introduce punitive taxes on Australian wines as early as October 18 after 60 days of investigation both from inside wine trade in China and outside.

China alleged that Australia dumped wines to the country at a margin of over 200%, thus creating unfair competition for domestic wine producers.  

But Australian Grape and Wine chief executive Tony Battaglene shot down the speculation in an interview, saying “I don’t think we’ll get one in 60 days.”

Nothing as of today has being announced yet by China Alcoholic Drinks Association (CADA), the official drinks association that proposed the anti-dumping investigation to Ministry of Commerce, on possibilities of raising taxes on Australian wine this month.

Australia is China’s biggest wine supplier and contributes to roughly 40% of all imported bottled wines sold in China. The country exported AU$1.1 billion worth of wines to China in the past 12 months ended in June this year, according to data released by Wine Australia, making China its most valuable export market.

In the original announcement in August, the ministry said the investigation would take a year, and it could be extended to February 18, 2022 if needed.

The investigation would also require cooperation from China’s nine leading Australian wine importers, which include AHCOF Industrial Development, ASC Fine Wines, Guangzhou Dragon’s Journey, Shanghai Foodstuffs Import and Export, Jiangsu Hebe Bay Wine Industry, C&D Logistics, Hongsu Industrial, Pernod Ricard China and Guangzhou Tall Trees based on a document released by Ministry of Commerce.

Update: The article is updated on October 12 to reflect that Pernod Ricard is also named by Ministry of Commerce for further investigation as the fourth company.

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