China launches second probe into Australian wine imports

Lin Tiangui, a representative of Winston Wine, looks at a bottles of wine produced from Winston Wine’s own Australian winery at one of its stores in Shanghai, China on October 18, 2011.

Qilai Shen | Bloomberg | In Pictures | Corbis Historical | Getty Images

China said on Monday it had launched an anti-subsidy investigation on some wine imports from Australia, two weeks after announcing it had begun an anti-dumping probe on such imports.

The investigations come against a backdrop of increasing tensions between the two countries after Canberra called for an international inquiry into the origins of the novel coronavirus, which was first detected in China’s central city of Wuhan.

China’s commerce ministry said in an online statement the anti-subsidy investigation was launched on Aug. 31 after a request from the China Wine Industry Association which said the wine imports had received subsidies from the Australian government.

The investigation will be on “wines in containers holding 2 liters or less,” and should be completed within a year or be extended to end-February 2022 under special circumstances.

The ministry also said that it would be investigating 37 subsidy items granted by the Australian government to its wine industry players, including “farm risk management”, “farm financing loan scheme” and “business growth funding projects.”

China is the top market for Australian wine exports and is also Australia’s largest trading partner, with two-way trade worth A$235 billion ($170 billion) last year.

Beijing recently imposed dumping tariffs on Australian barley, suspended some beef imports and told Chinese students and tourists it was not safe to travel to Australia because of accusations of racism.

After China announced the anti-dumping investigation, Australian trade minister Simon Birmingham had said China is considering launching an investigation into whether Australia has subsidized wine exports. He denied Australia has illegally dumped wine to China.

News of the earlier investigation had knocked a fifth off the market value of Australia’s biggest winemaker, Treasury Wine Estates. They were trading 0.8% higher on Monday amid the broader market’s 0.3% rise.

As in the anti-dumping investigation, China will look at Australian wines imported in 2019 and examine the damage done to the domestic wine industry from 2015 to 2019 in the anti-subsidy investigation.

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