China trade war: Beijing says Australian wine is cheap in latest insult

Australian wine is considered among the best in the world, but Beijing has delivered a fresh insult to local producers – saying China only bought it because it was “cheap”.

Australian wine is considered among the best in the world, but Beijing has delivered a fresh insult to local producers amid an ongoing trade stoush – saying China only bought the booze because it was “cheap”.

A piece in government mouthpiece the Global Times claimed the new trade tariffs – which have devastated the industry with import taxes of up to a staggering 212 per cent – could lead to a wine and grape “glut” in Australia when demand from Chinese importers drops.

The tabloid, which labelled the tariff a “destructive blow”, added that Chinese consumers would now look to buy wine from countries like Chile.

“Chinese customers chose Australian wines over those from other sources because they can get the same quality at a cheaper price,” wine importer Long Guanya, who bought some 200,000 bottles of Australian wines this year, said from his base in Xiamen.

“It (the new tariffs) will have a huge effect on my business, because after these tariffs, the price will be at least three times higher. I expect that the volume of imported Australian wine will sharply decrease.”

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Beijing has delivered a fresh insult to local wine producers, saying China only bought it because it was “cheap”. Picture: Noel Celis/AFP

Australia currently exports a whopping 39 per cent of all its wine product to China.

Coby Ladwig, an independent winemaker who took over Western Australia’s Rosenthal Wines in 2012, told news.com.au this morning that the tariffs were a “massive hit” to business.

“I really like the Chinese culture and people and we had built up a really good following, so to have all that cut off has been pretty hard to take,” Mr Ladwig, who has spent the last seven years fostering a thriving business relationship with the nation, said.

“I couldn’t believe the relationship was just cut off overnight – there was a feeling of disbelief, because we heard rumours something might be happening, but there was a bit of denial at first.”

He added that everyone in the industry is now “in the dark and we don’t know how long this will go on for – it’s scary times”.

Industry organisation Wine Australia said in a statement the temporary tariffs were “extremely disappointing” and would “significantly impact Australian grape and wine businesses”.

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Wine is just the latest Australian product to be potentially crippled by China’s trade subsidies, joining barley, timber, lamb and lobster – with fears the tactics could spread even further to other sectors.

Earlier this week, Trade Minister Simon Birmingham lashed China and warned that the eyes of the world were watching for any developments.

“Australia is not the only country that has seen these types of punitive measures and I expect the rest of the world will be watching quite closely what is happening in Australia,” Mr Birmingham said.

The Chinese embassy hit back at Australia’s concerns yesterday, declaring in a statement it “has actively fulfilled” its obligations under ChAFTA, the two countries’ free trade agreement, and that the “so-called concerns about China’s adherence … are totally unfounded”.

“Import tariffs from Australia has been lowered for six consecutive years since 2015. At present, about 95 per cent of imported goods from Australia enjoy zero tariffs,” the statement read.

“In contrast, more than 10 Chinese investment projects have been rejected by the Australian Government under the pretext of ambiguous national security or national interests since 2018.”

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The embassy added that in the past four years, Australia has launched 25 of its own anti-dumping and anti-subsidy investigations into Chinese products.

“These measures, inconsistent with the letter and spirit of ChAFTA, have undermined Chinese companies’ interests and brought negative impact on economic and trade co-operation between the two countries,” it said.

“We hope Australia can do more to enhance mutual trust and bilateral co-operation in line with the China-Australia comprehensive strategic partnership so as to bring the bilateral relations back to the right track as early as possible.”

Responding to the embassy’s statement, Mr Birmingham told the ABC’s Afternoon Briefing on Thursday “that the evidence just doesn’t stack up in terms of China just trying to deny that there’s nothing to see here”.

“Our wine industry knows that there’s something to see here. Our live seafood industry knows that there is. Our timber industry knows that there is. Our fresh meat industry knows that there is. Our barley and grain sector knows that there is,” he told host Patricia Karvelas.

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China called Australia’s concerns over its blocks on our imports “totally unfounded” on Thursday. Picture: Noel Celis/AFP

Trade Minister Simon Birmingham has vowed to “keep standing up for Australian industry”. Picture: Sean Davey

“The sectors that have seen the obvious, continuous accumulation of impacts throughout the course of this year and, indeed, in the case of the barley processors that started a couple of years ago, clearly can see a pattern of behaviour.

“And that pattern of behaviour is inconsistent with both the intent and the spirit, as well as the letter of ChAFTA or, of course, the commitments China has made more broadly to the World Trade Organisation.”

He added that the latest round of tariffs on the wine industry are “another step” in a “disappointing” pattern.

“The evidence is very clear in the Australian wine industry’s favour. We will continue to defend the wine industry by using the domestic process available in China and, ultimately, considering the appeal rights of the independent umpire through the World Trade Organisation,” he said.

“This is obviously another step in what has been a disappointing, frustrating and deeply concerning pattern of decisions by China over quite some period of time.

“We have called out those behaviours and that pattern of behaviour. We’ve done so publicly. We’ve done so directly with China. We are continuing to do so through the WTO, and we will keep standing up for Australian industry.”