China accusations of wine dumping risks billion-dollar industry

Almost 40 per cent of Australia's wine is exported to China. Photo / File

China this week launched an "anti-dumping investigation" into Australian wine exports, accusing Australia of flooding China with cheap wine at cost or below cost prices in an effort to skew the market in Australia's favour.

Almost 40 per cent of Australian wine is exported to China in a A$1.25 billion industry. Australia ships more bottles to the country than other wine-producing region. An article published on Tuesday in the state-owned Global Times newspaper, widely regarded as the mouthpiece of the Chinese Government, claims the investigation will be conducted "fairly and impartially" and "any measures taken to defend China's legitimate rights and interests can easily be misinterpreted as a counter-attack" to political provocations from Australia.

"If the market over-interprets this normal remedial measure, it is the Australian side that should take responsibility," it reads.

"Their provocations have undermined the political foundation of economic and trade exchanges, causing greater shocks than the anti-dumping probe itself could."

The article states such "continuous" provocations were at the hands of the Morrison Government, after it formally rejected China's maritime claims in the South China Sea with a message to the United Nations, and South Australian Senator Rex Patrick calling for the Chinese consulate near major naval construction projects in South Australia to close.

'Politically hostile atmosphere'

"Fundamentally speaking, the current politically hostile atmosphere comes down to the fact that some Australian politicians have deliberately sabotaged bilateral relations by continually creating new friction points with China," the Global Times piece reads.

"What's more, they do so without the necessary regard for their economy, which may suffer losses as a result of market panic."

Federal Trade Minister Simon Birmingham said the investigation was "a very disappointing and perplexing development" from its largest wine importer.

Australian officials admit they still haven't spoken to their Chinese counterparts since last year, and Birmingham saying Australia is "willing to sit down no matter how difficult the issue and discuss it in a grown-up like way … because that's what mature nations do".

'Potential to cause a lot of damage'

China's announcement has put the Government and Aussie winemakers on edge. Officials and industry groups say they are confused and worried about what will happen next.

"There's a lot of Chinese wines that are cheap and pretty decent wines at the low end of the market," BBC Asia Pacific editor Michael Bristow said.

"This row has great potential to cause a lot of damage to the Australian wine industry.

"It could have a major impact."

China's investigation is expected to be completed by August 18 next year, but could be prolonged until February 18, 2022, because of the coronavirus pandemic, the Chinese ministry said.

- news.com.au