Australia’s $1 Billion Wine Industry In Trouble – China Officially Slaps 218.4% Import Duties For 5 Years Effective Sunday
On Friday (March 26), China’s Ministry of Commerce announced that import duties between 116.2% and 218.4% will be imposed on Australian wines effective Sunday (March 28). The massive tariffs arrived after the ministry concluded that domestic wine industry had been hurt by the dumping of cheap Aussie wine. Worse, the anti-dumping punishment will last for 5 years.
The ministry said in a press release – “China’s domestic wine industry has suffered material damage, and there is a causal relationship between the dumping and subsidies and the material damage. The Ministry of Commerce conducted investigations in strict accordance with relevant Chinese laws and regulations and World Trade Organization (WTO) rules, and made the final ruling.”
In August 2020, China began a second investigation into imports of Australian wine, just after announcing a separate “anti-dumping” inquiry into its wine industry 2 weeks earlier. Beijing had wanted to impose an anti-dumping tariff of 202.70%, which would triple the price of Australian wine, as part of its punishment against Morrison administration.
The ministry said in a press release – “China’s domestic wine industry has suffered material damage, and there is a causal relationship between the dumping and subsidies and the material damage. The Ministry of Commerce conducted investigations in strict accordance with relevant Chinese laws and regulations and World Trade Organization (WTO) rules, and made the final ruling.”
In August 2020, China began a second investigation into imports of Australian wine, just after announcing a separate “anti-dumping” inquiry into its wine industry 2 weeks earlier. Beijing had wanted to impose an anti-dumping tariff of 202.70%, which would triple the price of Australian wine, as part of its punishment against Morrison administration.
By November, the Chinese government announced its initial finding, and preliminarily imposed anti-dumping tax – in the form of deposits – which ranged from 107.1% to 212.1%. Today’s official tariff rate is clearly higher than the preliminary tariffs. Additionally, the ministry also slapped anti-subsidy duties between 6.3% and 6.4%, but decided to drop it to prevent double taxation.
Among the major wine exporters, Treasury Wine Estates – owner of the popular Penfolds label – has been slapped with an anti-dumping duty of 175.6%. Yellow Tail, an Australian brand of wine produced by Casella Family Brands will pay a 170.9% tariff. Accolade Wines, which can be traced its beginning to Thomas Hardy and Sons, a company founded in 1853, have to pay the 167.1% import duties.
Other Australian wine exporters will pay up to 218.4% duties. But the damage is already done as far back as November 2020. Australian wine exporters watched in horror as stockpiles of wine stuck in warehouses thanks to “unofficial” boycott from its biggest customer. They had been warned by Chinese importers that shipments of Australian wine will not clear customs.
Among the major wine exporters, Treasury Wine Estates – owner of the popular Penfolds label – has been slapped with an anti-dumping duty of 175.6%. Yellow Tail, an Australian brand of wine produced by Casella Family Brands will pay a 170.9% tariff. Accolade Wines, which can be traced its beginning to Thomas Hardy and Sons, a company founded in 1853, have to pay the 167.1% import duties.
Other Australian wine exporters will pay up to 218.4% duties. But the damage is already done as far back as November 2020. Australian wine exporters watched in horror as stockpiles of wine stuck in warehouses thanks to “unofficial” boycott from its biggest customer. They had been warned by Chinese importers that shipments of Australian wine will not clear customs.
The custom clearance problems saw how more than 3,000 litres of wine from Penfolds and nearly 20,000 litres from Badger’s Brook Estate were detained at Chinese ports in January alone. With the new tariffs to take off officially this Sunday, Chinese wine traders said the 5-year anti-dumping punishment could completely wipe out Australian wine’s competitiveness in the Chinese market.
While large and established winemakers like Treasury Wine Estates may survive, small Australian wine producers will definitely collapse. Even Treasury Wine, the world’s largest listed winemaker with total revenue of A$2.88 billion in 2019, was forced to sell off some of its U.S. brands and assets to raise A$300 million in a desperate effort to increase sales.
China does not need wines from the land Down Under, but the same cannot be said about Australian wine growers. The ban and jaw-dropping huge tariffs were designed to cripple Australian wine exports to China which are worth A$1.2 billion a year – 167% more than the value of exports to its next biggest market, the United State.
While large and established winemakers like Treasury Wine Estates may survive, small Australian wine producers will definitely collapse. Even Treasury Wine, the world’s largest listed winemaker with total revenue of A$2.88 billion in 2019, was forced to sell off some of its U.S. brands and assets to raise A$300 million in a desperate effort to increase sales.
China does not need wines from the land Down Under, but the same cannot be said about Australian wine growers. The ban and jaw-dropping huge tariffs were designed to cripple Australian wine exports to China which are worth A$1.2 billion a year – 167% more than the value of exports to its next biggest market, the United State.
Australia’s Department of Foreign Affairs and Trade officials told Senate Estimates the value of Australian trade with China for almost all industries has plummeted by 40% since a trade dispute exploded between the two countries. And wine exports had fallen to less than $1 million in January, from a high of $164 million last October – a plunge of more than 99%.
Last month, several months after Beijing started its trade war against Canberra, the Australian wine giant Treasury Wine reported a 43% drop in first-half net profit to A$120.9 million (US$94 million), forcing it to cut its dividend by 25% to 15 Australian cents per share. To make matters worse, the second-half earnings are expected to come in “below” first-half earnings.
Australian Grape and Wine chief executive Tony Battaglene said – “When you’re at 200% you’re not viable and when you’re at 215%, you’re even less viable, so the market remains closed to Australian wine. We know we’re going to have a tough couple of years. The real pressure has come on those people who solely export into China and we have 1,000 businesses set up to do that”.
Last month, several months after Beijing started its trade war against Canberra, the Australian wine giant Treasury Wine reported a 43% drop in first-half net profit to A$120.9 million (US$94 million), forcing it to cut its dividend by 25% to 15 Australian cents per share. To make matters worse, the second-half earnings are expected to come in “below” first-half earnings.
Australian Grape and Wine chief executive Tony Battaglene said – “When you’re at 200% you’re not viable and when you’re at 215%, you’re even less viable, so the market remains closed to Australian wine. We know we’re going to have a tough couple of years. The real pressure has come on those people who solely export into China and we have 1,000 businesses set up to do that”.
Everything started when the Australian government chose to support Trump, who accused China’s incompetence in controlling the Covid-19 from spreading, despite tons of evidence that the U.S. president sat on his hands for months. Referring to the Covid-19 as the “China Virus” or a “Chinese Plague”, Trump’s political rhetoric included claims that the virus was “sent by China”.
It was a huge mistake when Prime Minister Scott Morrison’s campaigned in April, 2020 – urging top allies France, Germany and New Zealand to pressure China to give the foreign countries the “weapons inspector-like” powers to investigate the outbreaks. Beijing, of course, was not impressed that Canberra used the Coronavirus pandemic to engage political manipulation.
It was a huge mistake when Prime Minister Scott Morrison’s campaigned in April, 2020 – urging top allies France, Germany and New Zealand to pressure China to give the foreign countries the “weapons inspector-like” powers to investigate the outbreaks. Beijing, of course, was not impressed that Canberra used the Coronavirus pandemic to engage political manipulation.
China had mocked Australia of parroting U.S. President Donald Trump in its call for an inquiry to determine the origins of Covid-19, despite Morrison’s own admission that he had no evidence to suggest the disease originated in a laboratory in the Chinese city of Wuhan. Trump was the only leader who said he was convinced the virus may have originated in the Chinese virology lab.
Last April, Chinese Ambassador to Australia Cheng Jingye warned the Morrison government that its dangerous manoeuvre would spark a consumer boycott against Australian goods. Beijing made good on its promise, slapping an 80.5% tariff on all Australian barley grain in May after banning imports from four major Australian beef suppliers, allegedly over labelling issues.
By November, the situation was so bad that Chinese import agents warned their clients they had been informed that no Australian shipments of wheat, barley, sugar, red wine, timber, wool, lobster and copper ores would be cleared. The Aussie’s tourism and education sectors have also been targeted when Chinese tourists and students were advised to stay away from the country.
And by December, China’s top economic planner had granted approval to power plants to import coal without clearance restrictions, except for Australia, the world’s top exporter of coal. Beijing’s refusal to import Australian coal will cripple the country, which exported coal worth almost A$14 billion to China – the third largest export from the land Down Under.
By November, the situation was so bad that Chinese import agents warned their clients they had been informed that no Australian shipments of wheat, barley, sugar, red wine, timber, wool, lobster and copper ores would be cleared. The Aussie’s tourism and education sectors have also been targeted when Chinese tourists and students were advised to stay away from the country.
And by December, China’s top economic planner had granted approval to power plants to import coal without clearance restrictions, except for Australia, the world’s top exporter of coal. Beijing’s refusal to import Australian coal will cripple the country, which exported coal worth almost A$14 billion to China – the third largest export from the land Down Under.
In the same month, Australia’s Trade Minister Simon Birmingham confirmed that Australia has launched a formal complaint with the WTO over heavy tariffs – 80.5% – imposed by China on its barley exports back in May. The tariffs are expected to cost Australian farmers a whopping A$2.5 billion over the next 5 years. It would be interesting to see if Canberra will also complain about the latest tariffs on wines.
But even if China has breached the rules set under WTO (World Trade Organization) or even China-Australia Free Trade Agreement (ChAFTA), there’s very little Australia can do. Mr Birmingham admits it could take years to settle the disputes between the two countries. Australia currently has 106 anti-dumping and anti-subsidy investigations ongoing related to Chinese products.
Elizabeth Sheargold, a postdoctoral research fellow at the University of Wollongong School of Law in Australia, said – “ChAFTA, like most free trade agreements, does not oblige either party to the treaty to purchase goods or services from the other. Instead, in ChAFTA both countries committed to eliminate or lower some of the barriers to trade such as tariffs or import quotas.”
But even if China has breached the rules set under WTO (World Trade Organization) or even China-Australia Free Trade Agreement (ChAFTA), there’s very little Australia can do. Mr Birmingham admits it could take years to settle the disputes between the two countries. Australia currently has 106 anti-dumping and anti-subsidy investigations ongoing related to Chinese products.
Elizabeth Sheargold, a postdoctoral research fellow at the University of Wollongong School of Law in Australia, said – “ChAFTA, like most free trade agreements, does not oblige either party to the treaty to purchase goods or services from the other. Instead, in ChAFTA both countries committed to eliminate or lower some of the barriers to trade such as tariffs or import quotas.”
In a nutshell, experts said neither country appears to have violated specific rules of the trade pact contained in WTO or ChAFTA simply because the deals are not a binding contract. They are just a set of trading guidelines and rules that are mutually agreed upon by China and Australia. The rules do not say that China “must trade” with Australia, and vice versa.
China is Australia’s biggest trading partner – about one-third of the country’s total exports goes to the Chinese, contributing A$135 billion annually and providing thousands of jobs. Perhaps the Aussie, the U.S.’ “deputy sheriff” in the Asia-Pacific region could redirect A$1.2 billion of its wine exports to allies such as the United States, United Kingdom, Canada and European Union.
China is Australia’s biggest trading partner – about one-third of the country’s total exports goes to the Chinese, contributing A$135 billion annually and providing thousands of jobs. Perhaps the Aussie, the U.S.’ “deputy sheriff” in the Asia-Pacific region could redirect A$1.2 billion of its wine exports to allies such as the United States, United Kingdom, Canada and European Union.
We all know CCP is a Mala fide Bully...
ReplyDeleteHow convenience!
Delete"We all know"!!!
We all as in all those hallucinated katak under that fart filled well.
Know as been dictated under their omnipotent demoNcratic doctrines.
Bullyland running out of frens....
ReplyDeleteUS, Britannia, Australia, Canada, Germany, India etc etc etc...
Never mind, got "little brother" Malasie.....ha ha ha....
Big Brother should show more Brotherly love to Little Brothers, not BullyTemper or BullyTantrum. It is not Asian Culture or Value. Bad Upbringing?
ReplyDeleteEspecially when 500 yo Bullyland, Australia, and Britannia soldiers fought hard and liberated Asia, including 5000 yo Bullyland from the "inhuman" Japanese (KT's word, not mine) during WW2. If not for them, CCP gomen would not have become so powerful after liberation and started Rampas-ing Inner Mongolia, Tibet, Xinjiang, East and Southern Seas etc.
QUOTE
China's Bullying Tactics Will Only Unite Its Foes
For many countries, the argument for diversifying exports and supply chains is suddenly a lot more persuasive.
By Mihir Sharma
November 20, 2020
In recent years, China has made no secret of its ire at perceived slights from other countries. Its anger has been expressed sometimes through the tweets and hawkish soundbites of aggressive young “wolf warrior” diplomats, and at other times through unofficial boycotts and politically motivated prosecutions. Various members of U.S.-constructed alliances have found themselves on the receiving end, including South Korea, Canada and even mild-mannered Norway.
Still, the broadside Chinese officials launched against Australia this week represents a notable escalation. The criticism was shockingly overt: The Chinese embassy in Canberra provided journalists with a list of 14 ways in which Australia had offended. The list was almost amusingly exhaustive, citing everything from the hurdles raised to Chinese investment in Australia to the federal government’s funding of critical think tanks.
Given that China had already begun to constrain the import of a wide range of Australian products from wine to coal, the threat was equally overt. One Chinese official told a reporter in Canberra, “China is angry. If you make China the enemy, China will be the enemy.”
Many Australians will be worried; about a third of the country’s exports of goods and services go to China. Many executives from mining companies, food exporters and the like might agree with Australian Finance Minister Josh Frydenberg, who argued before the embassy issued its list that decoupling from China-centric supply chains “would carry huge economic costs” and that instead, “we can work with China.”
China’s response to Frydenberg’s plea for détente shows how likely that is. Certainly, putting pressure on Australia’s exports as the country goes through its first recession in 30 years is not the sort of thing a reliable partner does. If Chinese officials had intended to discredit those Australians who think Prime Minister Scott Morrison’s government should adopt a more conciliatory line toward Beijing, they couldn’t have done a better job.
This is likely a sign of how the new economic cold war will play out. China has made it clear that it intends to weaponize dependence on its massive economy. Access to Chinese consumers, profits from mainland financial markets and investment in infrastructure will all be made conditional on the behavior and rhetoric of partner countries.
.....con't
....con't
ReplyDeleteThat will in turn provoke new arguments within those nations. Capital, allied with exporters and China doves, will line up against market liberals, allied with domestic producers and national security hawks.
The problem for China is that it has done a terrible job exploiting these fault lines to date. Its efforts didn’t force Canada or South Korea to capitulate and there’s no reason to think they’ll work any better in Australia. Chinese leaders just don’t seem to learn: Publicly humiliating other countries, no matter how small, makes cooperation and compromise politically impossible. Even Frydenberg has had to harden his rhetoric a bit.
Indeed, for many of China’s trading partners, not just Australia, the argument for diversifying export markets and supply chains is more persuasive today than it was last week. And China should remember that dependence can run both ways. As my colleague David Fickling explained recently, Australia’s “ nuclear option” is to suspend iron ore exports — which drive the mainland’s steel industry — to China.
UNQUOTE
We should now call Bullyland "ahia" which in Hokkien means "big brother" Ahia-Land.....ha ha ha...
ReplyDeleteLike M(ahia)ddin......Big Brother Din ha ha ha....
https://en.wikipedia.org/wiki/Hokkien_honorifics
U can call China anything.
DeleteWho cares!
The trouble is who r u going to call for helps when u r in dire straits.
Uncle Sam? Auntie pommie? Brother dingo?
Remember: 君子周而不比，小人比而不周
Wakakakakaka…
While it was stupid of Morrison to support Trump, this episode clearly shows that China will use its size to bully smaller nations.
ReplyDeleteThe South China Sea is another clear example of China using its clout to bully nations who cannot afford to offend China.
Wait till China have more aircraft carriers built and you see China projecting itself further afield.
By then, no nation will be able to subdue China as it goes on its bullying ways.
Typically Yankee doodle military might conjecture!
DeleteSo what yr uncle Sam uttered is gospel truth of truth - based on his own wet dream.
China doesn't share that dream simply she has a lot to catch up then worrying about others.
PROVIDED these mfering pests don't clamouring for her heirlooms!
Who's bullying who & using what excuses?
Very well indoctrinated, u bunch of f*cked demoNcratic dickheads.
bully 2 learn well from bully 1, n their twated fanboy accuse bully 1 pula of doing same thing.
ReplyDeleteChinese 老祖宗 has a deep rooted advice
Delete“以子之矛陷子之盾何如”
To counter these kind of irrational fart!
But how could a nonchinese understand such an intricacy? All it knows is to wag the tail for its crumbs, then play dead.
no ball go fight bully n turn round to kick bully dog is not chinese way, its no ball bully with ccp characteristic.
DeleteTell that to all yr 台毒 dickheads, u included, of keep expecting others, especially Yankee, to fight yr renegade war of independence!
DeleteNow Liaoning is meeting Roosevelt at the SE sea front of China territory.
Go get yr 蔡妹妹 to declare independence officially now & see the unification war starts.
Remember to ask her to keep pampering biden about anything he says go if Roosevelt didn't turn & run to Guam via Philippines AGAIN.
Frame this "no ball go fight bully n turn round to kick bully dog is demoNcratic way" into a plaque & hand it overhead yr front door to replace that doggie anagram u have!
Respect is earned not God given. If you want others to treat you well, you must also do likewise, 己所不欲，勿施于人. Scot Morrison, on one hand blindly followed US order without honest justification, banned Huawei and dishonestly spreading lies to sully China reputation with Covid-19 allegation. On the other hand cried that China taking same action against Australia. Want to earn Renminbi yet insult your China. Who is bully?
ReplyDeleteboth usa n ccp is bully.
DeleteI pity Ktemoc.....every morning he wakes up in a country that he abhors....(mostly) White, Pro-American, Democracy, Australia.... no choice but to swallow it in order to Cari Makan....
ReplyDeleteNot only that, Australia itself, its way of life, its society is so much like USA.
If you leave out Canada, just next door to its giant neighbour, Australia is one country in the world which is so much like America in its society and outlook. The differences in Australia's institutions from USA mainly arise from their British heritage.
In fact , most older generation Australians that I have spoken to have no doubts about the strength of their historical ties to the USA.
Do you know what date is 4th of May ?
its the anniversary of the Battle of the Coral Sea, primarily fought between Japanese aircraft carriers and American aircraft carriers.
It was the spearhead of the Japanese invasion of Papua New Guinea from the sea.
Australia fully expected to be facing a Japanese invasion of Australia , and almost certain defeat , if the Yanks had lost the Battle of the Coral Sea.
So, Australia's support and alignment with US foreign policy is not about bodek-in Trump or bodek-ing Biden.
Its a long and fundamental alliance of shared history and shared values.
always reckless in your biased speculations and assumptions unto accusing others of this and that, wakakaka
DeleteWakakakakaka…
Delete"Its a long and fundamental alliance of shared history and shared values"
What a mindless Yankee asslicker!
That particular "alliance" with uncle Sam reaches its peak when dingo Morrison becomes the pm!
4th of May is the labour day in Oz & celebrates as such (with socialist connotation). It has NOTHING to do with the anniversary of the Battle of the Coral Sea.
Oz still shows closed bond with pommieland. There r still yearly military remembrance of cenotaph for those passing soldiers who died fighting for mother England in the old wars.
Mmmm… "most older generation Australians that I have spoken to have no doubts about the strength of their historical ties to the USA"
Must have been talking to Yankee doodles migrated to Oz to avoid those uncle Sam wants u military ad!
Respect is earned and not God given.
ReplyDeleteThe CCP 's behaviour , internationally and especially in the South China Sea has not earned it any respect from other countries.
As I said before, CCP has Business Associates all over Asia and the rest of the World.
CCP has almost no friends other than North Korea and Burma.
Almost everybody else trades with the CCP at the distance of a ten-foot pole.
The reaction of the majority of Malaysians , Kris Hisham wants to regard the CCP Foreign Minister as his DaGe that is his personal matter, but making clear CCP itself is NOT to be considered as a "DaGe" to Malaysia.
Ain't u imposing yr f*cked opinion onto others?
DeleteWho the fart r u, to speak on behalf of nations over in Asia and the rest of the World?
Key that remark of "Respect is earned and not God given" to yr grave, OK?
There is a world of a difference between the truth and a lie. Your world view really need update.
ReplyDelete"Almost everybody else trades with the CCP at the distance of a ten-foot pole." That's a joke. What Australia lost in the exports to China are quickly and gleefully snapped up by New Zealand, Canada and others.
The fact that US is losing its world Number One super power status fast made it panicky that it has resorted to rallying its pack of minions with despicable lies to do a group-attack of China, hoping to stall China advancement (so who is the bully here?)
Watch the following interview of Kenyan President Uhuru Kenyatta by CNN's Richard Quest (Western bias media worshipped by many as if everything is gospel truth). How Richard Quest selectively and sneakily trying to lead question the President to think that of all the many money lenders to Kenya, China is an evil one. Watch how the President demolished his dirty trick :
https://www.youtube.com/watch?v=AZjCsgHgrt4&t=409s