Australia’s largest wine exporters have reacted with dismay after Beijing’s Ministry of Commerce (MOFCOM) slapped massive 100 to 200 percent tariffs on imports from the weekend.
Importers of Casella Wines, Accolade Wines, Pernod-Ricard, Zilzie, Australian Vintage, and Brown Brothers etc. have also been laden with a 160.6 percent tariff.
Australian wine companies not highlighted or singled out, will be slugged with a broad-ranging 212.1 percent tariff.
Treasury Wines Estate (TWE) CEO Tim Ford said, “We are extremely disappointed to find our business, our partners’ businesses and the Australian wine industry in this position.”
“However, there is no doubt this will have a significant impact on many across the industry, costing jobs and hurting regional communities and economies which are the lifeblood of the wine sector,” he added.
Last week, MOFCOM announced it had made “preliminary rulings” regarding an ongoing investigation into “anti-dumping” allegations against Australian wine sellers into China.
MOFCOM claimed it found “substantial” dumping of wine from Australian wine companies and that there was a “direct relationship” between the dumping and actual damage in the Chinese wine market.
“That’s why we’re moving quickly to work with the industry and my officials and DFAT officials in Beijing to get an understanding so we can put our case around this decision … that we feel is quite outrageous and, to be honest, disproportionate to any reason that anyone has put to us subsequently,” he told the ABC.
The wine industry has reacted with dismay at the tariffs, with Australian Grape and Wine CEO Tony Battaglene standing firm by Australian exporters saying they did not engage in dumping-related conduct.“While we are disappointed with this development, our members will continue to cooperate with MOFCOM as the investigation continues, working towards an outcome that is consistent with the facts of the case, and supports the growth of the wine industry in Australia and China,” he said in a statement.
Greg Bondar, managing director of wine consultancy Alternative Palate, said the claims of dumping lacked “substance and specific details.”
He also referred to allegations of damage to China’s local wine industry as “baseless.”
“The $1.3 billion a year in exports of Australian wine to China will result in higher prices for Chinese consumers and force Australian winemakers to seek more opportune markets,” he told The Epoch Times.
“Tariffs can have unintended side effects making the Chinese domestic industries less efficient and innovative by reducing competition. They also hurt domestic consumers, since a lack of competition tends to push up prices,” he added. “Importers will pass the costs of tariffs on to customers.”