China’s Ministry of Commerce said on Tuesday it was launching an anti-dumping investigation into some wines imported from Australia.
Australian Federal Trade Minister Simon Birmingham said in a statement that Chinese authorities “Australia have also advised that they consider a request to launch an investigation into spending.”
“This is a very disappointing and confusing development,” said Birmingham, adding that “Australian wine is not sold at below market prices and exports are not subsidized.”
The announcement comes amid growing geopolitical tensions between the two countries. China is Australia’s best export market, and by far the largest destination for the island continent’s wine exports by value, according to the government’s sector manager, Wine Australia.
The Chinese study is aimed at “wines in containers holding 2 liters or less,” according to an English translation on the Ministry of Commerce’s website.
A typical bottle of wine is about 0.75 liters. The reason for the probe was not immediately clear.
The investigation will last one year – until August 18, 2021 – with the potential to extend until February 18, 2022, under special circumstances, according to the ministry’s online announcement.
Australia had the largest share of China’s imported wine market at 37%, according to data for the 12 months through May of Global Trade Atlas and quoted by Wine Australia in a August 4 report.
France was second at 27%, followed by Chile at 13%, the report said.
Shares of Australian wine giant drop
Trading in shares of Australia’s largest wine company Treasury Wine Estates was briefly halted pending an announcement, according to a statement on the Australian Stock Exchange website. Shares tumbled more than 13% in Tuesday trading.
Treasury Wine Estates later said in a statement released by the Australian Stock Exchange that the company would co-operate with all requests for information from Chinese and Australian authorities. The company added that it will continue to focus on building its premium and luxury brands, and generally work to grow its contribution to China.
Australia exported 62% of its wine produced in the 12 months through the end of June, according to the Wine Australia report.
China, the mainland was by far the largest market value, with exports 0.7% up to 1.1 billion Australian dollars ($ 790 million), the report said, noting growth in exports at higher prices and a decline at the lower end of ‘ a brand.
Wine Australia did not immediately respond to a request for comment from CNBC.
– CNBC’s Sil Koulouris contributed to this report.
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