The Chinese government on November 27 imposed preliminary trade tariffs of between 107.1 per cent to 212.1 per cent on all Australian wineries, as a result of Beijing’s investigations into alleged dumping by Australian producers.
Every year Australia exports $1.2 billion of wine to China, accounting for over a third of the total value of Australian wine exports.
The industry previously benefited from zero tariffs under the China-Australia free trade agreement.
There are fears that small wine producers , and Chinese-Australian winery owners say they too are feeling the pinch.
Highlights:
- China imposed preliminary tariffs of between 107.1 per cent to 212.1 per cent on all Australian wine exports
- Chinese owners of Australian wine estates fear that the measure will significantly affect their businesses
- They are taking up some temporary strategies to deal with the expected losses
Jennifer Wang has been running Golden Acorn Wines in South Australia’s Barossa Valley for more than seven years.
She told SBS Mandarin the newly implemented 212.1 per cent tariff on her business has forced her to prepare more cash flow, which could have a huge impact on her operations in the long run.
"I have to prepare at least $20 to $34 million in cash flow for $10 million worth of goods. This is two to three times more than in the past."
She said wine distributors in China are placing extra pressure on her as a result of the tariffs.
"They asked me if it‘s still worth selling Australian wines. They are worried about whether prices will rise."
A woman shops at an imported food and wine shop in Shanghai, China, on 27 November. Source: AAP
'It's too cruel'
Companies that participated in China's investigations into alleged will pay lower duties of between 160-170 per cent.
Charlie Wang participated in the investigation and was recently informed that a 160.6 per cent tariff would be placed on his Eling Forest Winery in NSW.
He said while his figure may seem better than the 212.1 per cent tariff placed on other wineries, he believes the entire situation is a “disaster”.
"We took the initiative to respond to China's anti-dumping investigation. We provided some materials to the Ministry of Commerce of China to prove that we did not conduct dumping. It ended up with a tariff increase of 160.6 per cent.
"Even so, it's too cruel. No one can continue their business.”
China launched the anti-dumping and countervailing duties investigations on Australian wineries in August.
Source: Photo by Mal Fairclough
It comes amid escalating tensions between both countries, most recently over a tweet by a Chinese official promoting a fake image of an Australian soldier slitting an Afghan child’s throat, which
For many Chinese-Australian wine producers, the investigation period has been a case of waiting for the other shoe to drop.
As a result, many have made preparations over the past three months.
"We increased the inventory in China. I hope the tariff policy could be changed before the inventory gets sold out,” Charlie said.
Jennifer adopted a similar strategy.
"My inventory in China can last until the end of next year."
In addition, Charlie has hopes that he can still do business despite the tariffs.
"[China] just imposes tariffs on items under two liters, and still zero tariffs on items above two liters. There is still some room for commercial operations, let's see how to do it."
While these two producers are trying to reduce their costs on the ground, Will Wang, the owner of exporting company Rawvino Wines, prefers to direct his concerns upwards.
He plans to write to Prime Minister Scott Morrison together with other winery operators, with hopes that a joint letter could "help the Australian government evaluate their opponent correctly”.
The escalation of trade tensions between China and Australia has restricted the export of many Australian products to China, while the federal government is preparing to file a complaint with the World Trade Organisation over barley tariffs.
Heng Wang is a professor and co-director of the University of New South Wales Law's Herbert Smith Freehills China International Business and Economic Law (CIBEL) Centre.
He said the government’s complaint to the WTO would likely take “more than one year if it went through all the processes of WTO dispute settlement."
“The multi-party interim appeal arrangement (MPIA) is a stopgap measure to temporarily address the WTO Appellate Body crisis. The operation of MPIA remains to be seen."
"Moreover, the WTO ruling does not have retrospective effects.”
