Nov 28: China has declared Australian crackdown by announcing punitive action against Australian wine imports by imposing anti- dumping duty of over 200%, despite the Free Trade Agreement that called for duty free imports from last year, making it the biggest market for Australian wines with about 37% of its wines exported to China and assuring one Aussie job out of 13, writes Subhash Arora
In what Australia considers a breach of the Free Trade Agreement, China has announced tariffs on Australian wines ranging between 107% and 212%, depending on the producer from today (28 November) for what Beijing claims as ‘dumping’ of Oz wine on the Chinese market causing “substantial damage to the domestic industry”, according to The Drinks Business. There is no fixed end-date to the tariffs described merely as “temporary”.
Australian trade minister, Simon Birmingham, said in a statement, “This is a devastating blow to those businesses who trade with China in the wine industry. It will render their business with China unviable for many wine companies. We think it’s unjustified, and without evidence to back it up.”
Australian wine, beef, coal and other exports have been targeted by the Chinese government in the recent trade standoff between the two countries which have been simmering for two years, reaching a boiling point now. Earlier, in 2018 also shipments were stuck up uncleared by the Customs in China for quite some time seemingly due to political interference.
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Australia’s wine exports to China had already been effectively halted with exporters reporting no customs clearance since 6 November when the unofficial ban became effective, according to Australian Grape and Wine (AGAW)- a wine trade body, thus confirming the unwritten and unofficial ban on several Australian products including wines. About 60 ships carrying coal reportedly stuck near the Chinese coast and two bulk wine carriers waiting off-shore since June, two months before the anti-dumping investigation was launched, were finally allowed to dock this week.
Half of all wine exports to China had not left Australian shores due to growing uncertainty in the industry. Usually, this is the business period of bumper shipments because of the Chinese New Year on 12 February, 2021.
The Ministry of Commerce of China had initiated anti-dumping investigation into Australian wine imports on 17 August, which was to be completed in 12 months but the punitive duties have been imposed in less than 4 months. More than 2,400 Australian exporters who exported wine to China last year, are affected.
According to the Financial Times Chinese embassy in Canberra recently handed the local media a short document detailing 14 grievances that China says are the cause of its rapidly deteriorating relations with Australia.
The complaints listed are- China saying Australia has been interfering in its sovereignty through critical statements on Taiwan, Hong Kong, the South China Sea and Xinjiang, and unfairly excluding Chinese companies like Huawei from Australia’s 5G telecommunications network.
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South Australia diversifies
Meanwhile, a new program has been launched to help the small and medium wine companies of South Australia to diversify into the emerging Asian markets for the first time and focus exports to Asian countries like Japan, Malaysia, South Korea and India. The Program will develop resources on each of these four markets to help wineries know what to expect and how to brace themselves. Market overview of each country, information about sales channels, an in-depth consumer profile and a guide to doing business in each market will be provided. (India could perhaps take a cue from this model to boost its exports by focussing on a few specific markets at a time).
The second part of the Emerging Markets Program is the development of a turn-key South Australian wine education program for decision-makers in each market, including wine importers, buyers, distributors and hospitality professionals. The new export program will be rolled out in one country at a time, starting with Japan before the year- end. The full set of resources is expected to be available by June, 2021.
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Interestingly, South Australian Wine Industry Association in South Australia conducted a wine education seminar at the Australian High Commission in November 2017 when The Government of South Australia announced a two-year wine education programme in Delhi and Mumbai in order to showcase premium wines of South Australian regions and winemaking expertise in the Indian market, starting in 2018. But nothing was heard thereafter. Perhaps, the programme will be rolled out now.
Subhash Arora
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