China imposes tariffs of up to 212% on Australian wine for five years

The imposition of tariffs will effectively eliminate imports of wine for most Australian producers, market observers say, with exports worth A$1.1bn in 2020.

Chinese tariffs on Australian wine will be made permanent for five years, officials have announced, after they were provisionally imposed in November 2020.

China’s Ministry of Commerce launched an investigation in October last year into alleged dumping of wine imported from Australia in containers of 2 liters or less.

The following month it imposed provisional tariffs of between 107.1 percent and 212.1 percent, effectively crippling the export of Australian wine to China. These have now been made permanent, with the upper limit of tariffs set at 218.4 percent.

The value of Australian wine exports to mainland China stood at A$1.1 billion ($836 million; €713 million) for the year to the end of June 2020, an increase of 0.7 percent on the year before. Australia’s second-biggest wine market is the US, with exports valued at A$430 million.

The volume of wine exported to China decreased by 17 percent between FY 2019 and FY 2020 to 121 million liters. However, the average value of a liter increased because of a greater focus on high-value premium wines over those at the cheaper end of the market.

Tony Battaglene, chief executive of trade body Australian Grape & Wine, said he was disappointed but not surprised by the outcome.

“We continue to reject the allegations levelled against Australian Grape & Wine members and have approached both investigations [conducted by China] as collaboratively and transparently as possible,” he said in a statement.

“Our focus now is two-fold. Firstly, we’re working with industry and the Australian government to assess options available to us within the Chinese system and internationally. And secondly, we’re focusing on growing demand for Australian wine in other markets across Asia, Europe, US, and the UK.”

ASX-listed Treasury Wine Estates, one of Australia’s largest wine producers, told shareholders last week that it would see a tariff of 175.6 percent imposed on its exports to China for at least five years.

The firm said earlier this year that it would not abandon the Chinese market, but that it would attempt to redirect some of its premium wine to other markets including the US, Japan and South Korea.

The imposition of tariffs follows punitive measures imposed on other commodities such as barley, beef and seafood, as a diplomatic dispute over an investigation into the origins of the coronavirus outbreak escalated into a trade war.