By Nicki Bourlioufas
China has begun an anti-dumping probe into Australian wine imports, which has slashed value off Australia’s biggest winemaker Treasury Wine Estates Ltd (TWE).
TWE, Australia’s biggest wine exporter to China, has said it will cooperate with the Chinese Ministry of Commerce’s anti-dumping investigation into Australian wine import. The investigation comes against a backdrop of increasing tension between China and Australia, which led calls for an international inquiry into the origins of COVID-19. Shares of Treasury, one of the world’s largest winemakers, plunged 20% from over $12 to below $10 on the announcement.
The inquiry has slashed the confidence of Australian wine exporters. China is the by far the nation’s largest export market. Australia is now the biggest importer of wine into China, having overtaken France in 2019. Any restrictions on future supply or taxes would threaten that leadership position and sales of Australian wine at bars and restaurants across China, where the nation’s big bold red wines are heavily sought.
The Chinese regulator will examine 10 Australian wine producers, including Treasury Wine Estates, the maker of Penfolds, and Accolade Wines, owner of the popular Hardys wine label. The 2019 calendar year would be the primary focus of its investigation, but the inquiry will cover the 2015 to 2019 period.
TWE said it has “a long and respectful relationship with China over many years through its team, partners, customers and consumers. As an importer of high-quality, premium Australian wine, including brands such as Penfolds, TWE remains committed to China as a priority market and will continue to invest in its Chinese business and its relationships with customers and consumers.
“TWE’s focus will remain on building premium and luxury brands, investing in the local operating model and team, and working with partners to enhance the wine category and grow our contribution to China,” the company said.