The Chinese Ministry of Commerce has determined that Australian exporters have been dumping wine into its market.
“There is dumping of imported wines originating in Australia … (and) it has been substantive,” the Chinese Ministry of Commerce said in a statement on its website this morning.
“There is a causal relationship between dumping and material damage and it has been decided to implement temporary anti-dumping measures … in the form of a deposit from November 28.”
The ministry said the “margin ratio” for the deposit would be between 107.1 per cent and 212.1 per cent.
It said the investigation had been conducted in “strict accordance with relevant Chinese laws and regulations and WTO (World Trade Organisation) rules”.
China is Australia’s largest wine export market with $1.2 billion worth shipped last financial year. South Australia is responsible for 50 per cent of Australian production.
A short time ago, Treasury Wine Estates – owner of SA labels Penfolds, Wynns and Wolf Blass – requested a trading halt from the ASX while it reviewed China’s anti-dumping measures and allow it to update the market.
TWE, which holds over 20 wineries across Australia and is the largest listed alcohol company on the ASX, saw its share price drop 11 per cent after China’s announcement.
“TWE requests a trading halt of its securities pending the preparation and release of an announcement by TWE regarding the decision announced today by the Chines Ministry of Commerce to apply provisional anti-dumping measures to Australian wine imports into China,” Kirsten Gray, TWE’s Chief Corporate Services Officer, wrote to the ASX.
“TWE is reviewing the details of the provisional measures as a matter of urgency in order to update the market.
“The company request that the trading halt be effective immediately and remain in place until the earlier of the commencement of normal trading on Tuesday 1 December 2020, or the release of an announcement by the company in relation to the matter.”
The ASX granted TWE’s request with the company’s trading set to recommence on Tuesday.
Australian Vintage Limited also saw a four per cent drop in their share price.
In May, China imposed an 80 per cent tariff on Australian barley following an anti-dumping investigation and has since targeted timber and lobsters, while it’s reported that more than 80 vessels carrying Australian coal have been anchored off Chinese ports for weeks, unable to unload.
Agriculture Minister David Littleproud said the Australian Government was “extremely disappointed” by China’s wine tariff decision.
“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,” he said.
“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.
“We will continue to work with our wine industry and Chinese authorities as part of the ongoing dumping investigation, but we will of course consider all of our options moving forward.
“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.”
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