China imposes non permanent anti-subsidy charges on Australian wine imports

© Reuters. Bottles of Australian wine are seen in a shop selling imported wine in Beijing

BEIJING / SYDNEY (Reuters) – China will temporarily impose anti-subsidy fees on some Australian wine imports from Dec. 11, the Commerce Department said Thursday, increasing pressure on the industry amid mounting tensions between the two nations.

Importers who bring in wines that are examined for Australian subsidy payments must, according to the declaration, make deposits with the Chinese customs authorities.

Australia is aware of the decision, Commerce Secretary Simon Birmingham's office said, but declined to provide Reuters with further comments after China's announcement.

China launched an investigation into Australia's wine grant schemes in August at the request of the China Wine Industry Association. Last month anti-dumping duties ranging from 107.1% to 212.1% were imposed on wines imported from Australia following a separate anti-dumping investigation.

The 6.3% anti-subsidy deposits are added to these tariffs for the world's largest publicly traded winemaker, the Australian Treasury Wine Estates (OTC :), Casella Wines and Swan Vintage. Pernod Ricard (PA 🙂 will attract a rate of 6.4%.

Tony Battaglene, executive director of Australian Grape and Wine, said the wine industry is denying the subsidy allegation. "We don't think it's justified," he said.

Winemakers had already made commercial decisions to divert wine supplies away from China after anti-dumping duties of up to 212% were imposed. Some companies were removing wine from ships en route to China when they docked in Singapore, he said.

Canberra views China's moves against Australian wine as part of a pattern of punitive trade measures as Australia called for an independent investigation into the origins of the novel coronavirus pandemic.

"The various claims that China has made simply do not stand up to the test of evidence. We will therefore continue to defend, appeal and, of course, call for this behavior," Birmingham told Seven Network on Thursday morning before the wine verdict is made public.

On Wednesday, Birmingham told Parliament that China is not abiding by a free trade agreement between the two nations or World Trade Organization commitments and appears to be targeting Australian products.

At a WTO meeting, Australia had raised concerns that China was taking action against Australian barley, wine, meat, dairy products, live seafood, logs, wood, coal and cotton.

The Chinese embassy replied that the comments on China's compliance with the free trade agreement were "completely unfounded".

Cai Xuefei, an independent liquor industry analyst based in Hefei, said the subsidy decision was "a punishment".

"If the price is higher, it will have a huge impact on sales," he said.

South American winemakers would benefit as Australian wine is priced at a disadvantage in China, he said.

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