Chinese customs authorities have blocked around 20,000 bottles of Australian wines, including Australian flagship wine brand, Penfolds, over what it calls a “labelling issue”, as Australian wine exports to China essentially ground to a halt, after being slapped with 212% anti-dumping tariff.
This adds onto a long list of woes for Penfolds’ parent company Treasury Wine Estates, just a week after it announced its China business suffered a 37% drop in profits in the six months ended in December last year.
According to information released by Chinese General Administration of Customs, two batches of Penfolds wines imported by a Fujian based cross-border e-commerce company were flagged and blocked by customs authorities in Shenzhen, the southern metropolis near Hong Kong.
The first batch involves 675 kg of Penfolds Bin 128 Coonawarra Shiraz and the second batch involves 2700 kg of Penfolds Bin 28 Kalimna Shiraz. Both are from 2018 vintage. Typically, one 750ml bottle of wine would weigh around 1.2kg. The seized Penfolds would thus equal to about 3,000 bottles.
It’s not immediately clear what exactly the labelling issue is, but according to a person with knowledge to the matter it is related to Shiraz’s translated Chinese name. In Chinese, three common versions are used, 西拉, 设拉子 and 希哈.
In addition to Penfolds, another Australian winery, Badger’s Brook’s wines were blocked by customs in southwestern metropolis Chongqing as well, involving 19,854 kg of wines (roughly around 16,500 bottles) including red wine blends, Shiraz, Pinot Noir, Chardonnay and Sauvignon Blanc.
TWE said it’s actively working to understand the situation to resolve the matter.
According to the General Administration of Customs, the “unauthorized” wines would be “either returned or destroyed in accordance with the law at the port of entry.”
The heighted scrutiny on Australian wines heading to China came after China slapped two rounds of hefty tariffs on Australia up to 218% late last year, which immediately brought down Australian wine exports to the country to nearly zero in the month of December, as data released by Wine Australia has shown.
Aussie wine exports to China as a result dropped by 14% in 2020 even though the twin tariffs were announced in the last two months of the year, and are expected to plunge further this year since exports will be only “minimal”.
Before the tariffs, Australia exports AU$1.3 billion worth of wines to China, its most profitable market, and accounts for about 40% market share, but with the crushing tariffs, Wine Australia warns that exports “will be constrained” and expects more bulk wine shipment, which for now is spared.