CLARE Valley’s $13 million wine export trade to China is under threat after last week’s launch of an anti-dumping inquiry and an investigation into whether Australian wine is being subsidised by the government.
Federal trade minister Simon Birmingham said China’s Ministry of Commerce had announced the investigation after an application from its local industry.
The Australian Government said it was also aware China was also considering a countervailing duties investigation into whether Australian wine exports are receiving and benefiting from Government subsidies.
“This is a very disappointing and perplexing development,” Minister Birmingham said.
“Our wine industry has worked incredibly hard to establish itself as a world-leading producer and export powerhouse.
“Australian wine is highly sought after in China because of its quality. Australian wine is not sold at below market prices and exports are not subsidised.
“Australia will engage fully with the Chinese processes to strongly argue the case that there are no grounds to uphold the claims being made.
“Our government will stand with the Australian wine industry to uphold their integrity and hard-earned reputation for producing wines in high demand throughout the world.”
The Clare Valley’s wine exports to China are worth $13 million (June 1, 2019, to June 30, 2020) of the region’s $34m wine exports.
It represents a 21 per cent increase in Clare Valley wine exports to China from 2019 to 2020.
Clare Valley Wine & Grape Association vice-chair and Kilikanoon managing director Warrick Duthy also refuted China’s claims, but said it posed a very real threat to Australia’s multi-billion dollar wine export industry.
“There’s no evidence to suggest anyone in the Australian wine industry has been dumping wine in China or any other market in the world,” he said.
“We are not an industry that gets government subsidised support.
“The definition of dumped is selling below cost, if you look at Clare in particular, we are a high cost production region and there would be zero activity that could be considered dumping.
“The Chinese market has higher average prices than other countries because China buys high quality Australian wine.”
Mr Duthy said he hoped the inquiry would be take a “thorough and objective” approach to clear the Australian wine industry from the claims of wine dumping.
“The big question is how much of this is to do with political posturing?” he said.
“I’m just hopeful the people in Canberra will understand the subtle messaging implicit in this action.
“We are a very big exporter of wine to China, it is our most important and fastest growing market.
“It would have a devastating effect on Australian wine if a tariff was placed on our wine.
“This is an industry that has been through drought, fire and now COVID-19, we sure as hell don’t need a tariff on Australian wines in China.
“It would just about put the Australian wine industry on its knees.”
Mr Duthy said the impact of a tariff on Australian wine in China would be felt right back to every grower in the Clare Valley.
“This could have a devastating impact on grape prices and in turn growers just at a time when we’ve been seeing really good grape prices over the last few years due to a shortage of grapes and demand into China.”