Australian wine sector braces for informal China trade ban
There are new fears China could slap import taxes on Australian wine, or essentially cut off shipments from Friday.
SA News
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Winemakers are bracing for the biggest trade blow from China yet, with fears it could cut off Australian wine imports from Friday and impose new import taxes.
Treasury Wine Estates, the makers of Penfolds, issued a statement to the ASX on Wednesday confirming the China Alcoholic Drinks Association had asked the Chinese Ministry of Commerce to impose “retrospective tariffs” on Australian wine imports.
It’s added to fears China could slap interim tariffs on wine in coming weeks as part of its ongoing anti-dumping inquiry, but that is far from certain at this stage.
“It is not known whether MOFCOM will accept CADA’s request, whether tariffs will be determined to apply to the products as a result of the anti-dumping investigation, or if they do, whether they will be applied retrospectively,” TWE’s statement said.
Interim or retrospective tariffs would be a blow to Australia’s $1.1 billion wine exports to China, and will impact South Australia more than any other state.
China is SA’s biggest export market, with the state sending $813.9 million worth of wine or more than 43 per cent of its wine exports to the country last financial year.
Australian winemakers have also heard from Chinese importers that an informal message has been sent from authorities asking them to stop importing several Australian goods including wine from November 6.
Trade Minister Simon Birmingham said: “We continue to work with the industry to engage fully with Chinese processes to strongly argue the case that there are no grounds to uphold the claims being made, and therefore there would be no basis for the application of tariffs, retrospective or otherwise.”
Australian Grape and Wine chief executive Tony Battaglene said: “We’re waiting to see what happens on Friday.”
“The story that they’re giving is that after Friday, nothing will be cleared through customs.
“We’ve got no formal, official confirmation from the Chinese or DFAT but that’s the story we’re hearing from both importers and exporters.”
Mr Battaglene said China could only seek to impose retrospective tariffs after it had launched preliminary tariffs, and would likely wait to do anything until after Australia submitted its responses to the anti-dumping inquiry next Friday.
He believed CADA had publicly asked for tariffs now because it hadn’t done so in its initial application asking for an inquiry into Australian wine.
“We’ll have to unpick what it means over the next week or so,” he said.
“We don’t believe that we have a case to answer so it’s going to be difficult to impose tariffs, let alone retroactive ones.”
The sector fears there is little Australia can do to counter the informal trade block.
“If there’s no formal communication from the Chinese government to ports or importers, then … its just a decision being made by these people … you can’t prove it,” Mr Battaglene said.
Australian winemakers would continue to co-operate with an anti-dumping inquiry China launched in August, he said.
Treasury Wine Estates said it was aware of recent media reports and speculation about a number of Australian exports to China, including wine.
“TWE has not had any formal advice or notification from the Chinese authorities and therefore has nothing further to add at this time,” a spokeswoman said.
The multi-billion-dollar copper mining sector is also monitoring the situation after reports it could be another target, along with sugar, timber, barley, coal and lobster.
More than 20 tonnes of Australian rock lobster shipments were stranded at a Chinese airport at the weekend for additional customs screening.
Minister Birmingham said China’s Ministry of Commerce had denied the rumours about an informal ban.
“Right now, they have said that these types of meetings instructing Chinese businesses not to buy have not occurred,” Senator Birmingham said.
“If that’s the case, there’s no reason why our exporters should see any disruption.”
But he urged China to give businesses clarity so they could trade with confidence.
Asked about the reports, China’s Foreign Ministry Spokesperson Wang Wenbin said: “Chinese authorities take inspection and quarantine measures on imported products in accordance with laws and regulations.”
He urged Australia to “do more to enhance mutual trust and bilateral co-operation” and “bring the bilateral relations back to the right track as early as possible”.