World News – UK – China’s wine tariffs will have « devastating effects » on small Australian producers, the trading group says

SINGAPORE â ???? Small exporters, wine growers and regional communities will feel the brunt of China’s decision to impose high tariffs on Australian wines. According to Tony Battaglene, executive director of Australian Grape and Wine, the national association of grape and wine producers.

China’s Ministry of Commerce on Friday announced provisional anti-dumping tariffs of between 107% and 212% on Australian bottled wine imports, which went into effect the following day. This follows China’s anti-dumping investigation into wine imports from Australia earlier this year.

« It will have a devastating impact, » Battaglene said Monday on CNBC’s « Squawk Box Asia ». « He stated that larger Australian wine exporters who have diversified their portfolios would likely be able to handle China’s decision, although they too would feel the pain.

« It’s wine growers, regional communities and small exporters who have very little to adapt. You will suffer, « said Battaglene.

Getting into other markets in the short term is not easy as these markets take time, relationships and money to develop, he added. « We just don’t have that. Is this our peak export period? 50% of our product goes to China in the last four months of the year. This is closed. So this product has nowhere else to go. « 

Battaglene denied Beijing’s allegations of dumping, stating that China is the « highest price point market » for Australian wines, where exporters make more dollars per liter than anywhere else.

« We have higher margins in China, so we are clearly not shedding there. If anything, we’ll hit. So it’s clearly ridiculous and we just don’t understand why you would even suggest such a thing, « he said.

China is the main wine export destination for Australia. According to Wine Australia, it accounted for 39% of total exports in the twelve months ended September 2020.

According to Battaglene, many of Australia’s smaller wine exporters, especially those who only export to China, are also financed with Chinese money. He stated that both these exporters and importers in China will be affected by the tariffs.

Australian Trade Minister Simon Birmingham told reporters on Monday that there are a number of procedures in place to resolve the disputes with Chinese agricultural officials, Chinese customs officials or, ultimately, the World Trade Organization.

« But we have also acknowledged that there is a cumulative impact of what happened to China. This series of individual measures China has taken against Australian business earlier this year is worrying, « he said, adding that Australia remains ready for a dialogue with China to resolve the issue.

On Friday, Australia’s Agriculture Minister David Littleproud tweeted that the Canberra government was « extremely disappointed » with China’s decision to impose temporary tariffs on Australian wine.

« The fact is that Australia is one of the least subsidized products in the world and has the second lowest level of agricultural subsidies in the OECD, » Littleproud said. He added that the Australian government « categorically rejects any claim that our wine producers are dumping products into China, and we continue to believe that there is no basis or evidence for these claims. « 

Canberra-Beijing bilateral relations deteriorated earlier this year after Australia backed a growing demand for an international investigation into China’s handling of the coronavirus pandemic.

China has taken a number of measures against Australian exporters, including anti-dumping and anti-subsidy tariffs on Australian barley, a ban on imports of several red meat slaughterhouses, and reports reportedly verbally urging state utilities and steel mills to stop importing Australian coal. Last month, two Australian cotton industry groups said China had begun preventing its spinning mills from using cotton imported from Down Under.

Economists have said that potential import restrictions from China would have a bigger impact on Australian mining exports as they take up a large chunk of the export basket. Much of China’s iron ore imports required to make steel come from Australia, according to Oxford Economics. Given the difficulty of finding alternative sources in the short term, China has not yet put strict regulations in place on Australian iron ore exports.

The world’s second largest economy remains Australia’s largest trading partner in goods and services, accounting for about 27. According to government data, accounts for 4% of Australia’s trade with the world.

Earlier this month, both China and Australia signed the world’s largest trade bloc. the regional comprehensive economic partnership or RCEP.

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