China slaps anti-dumping duties on Australian wine

China has decided to impose anti-dumping duties ranging from 116.2 percent to 218.4 percent on Australian wine for a period of five years, starting Sunday, the Ministry of Commerce said in a statement on Friday.

In its ruling, the ministry said that Australian wines had been subsidized and sold under market value, resulting in substantial damages to the domestic wine industry. The subsidy rate is between 6.3 percent and 6.4 percent. To avoid double taxation, the ministry has decided not to impose anti-subsidy tax, said the statement.

The ministry said the anti-dumping probe against Australian wine was conducted in accordance with legal procedures and World Trade Organization rules. Australian wine importers will need to pay taxes to the General Administration of Customs, the ministry said.

In August, China started anti-dumping and anti-subsidies investigations into wines imported from Australia, following a request from the China Alcoholic Drinks Association that claimed that in recent years, imports of wines from Australia have been at declining prices and were threatening the domestic wine industry.

The anti-dumping probe looked into imports of wines from Australia in individual containers holding two liters or less in 2019, according to the ministry.

Between 2015 and 2019, the volume of wine that China imported from Australia surged 113 percent, while import prices dropped 13.36 percent. The market share of Australian wine in China increased 9.7 percent, according to the China Alcoholic Drinks Association.

Australia was the leading wine exporter to China since 2019, according to Wine Australia, an industry association.

By the end of last year, China was the top export market for Australian wine in value terms. The total number of people drinking imported wine in China stood at 52 million, nearly double the size from seven years ago. For grape wines, 40 percent of the volume consumed in China is imported and Australia accounted for nearly a quarter of that, the association said.

"The ruling has a significant impact on major Australian wine retailers such as Treasury Wine Estates, and the degree of impact on smaller local wineries needs further observation. The influence on Chinese importers, however, will be limited, as they can choose to import similar types of wines from other countries," said Dai Hongjing, a wine industry analyst.