By Nicki Bourlioufas
The Chinese Ministry of Commerce (MOFCOM) has targeted Treasury Wine Estates, Casella Family Brands, Pernod Richard and Australia Swan Vintage as part of its anti-dumping (AD) and countervailing duties (CVD) investigations into Australian wine exports.
Australia’s largest wine producer Treasury Wine Estates owns the heavily exported Penfolds and Lindemans brands, while French-owned Pernod Ricard owns the Jacob’s Creek. Casella owns the highly successful Yellow Tail brand.
The trade investigations were initiated in August. On 28 September, MOFCOM announced it would conduct the anti-dumping investigation by using a sampling approach. MOFCOM selected TWE, Casella Wines and Australia Swan Vintage based on the companies’ reported export volumes. The companies had seven days to comment on “sampling results” from an initial investigations of their exports.
Separately, the Countervailing Duties Investigation has asked the same three companies, as well as Pernod Ricard, to comment on its initial sample results, with seven days to respond from 30 September.
The allegations have hit TWE especially as political and trade tensions flare between the nations. TWE shares fell to $8.40 in September, their lowest levels since January 2016, according to Bloomberg data, with TWE trading at $9.13 on 7 October, continuing their fall since China’s August announcement.
Australia is the biggest importer of wine into China, and TWE the biggest seller. Reflecting how lucrative Chinese consumers are, the average value of wine exported to China jumped 22% to $9.07 per litre FOB in 2019-20, with more premium wines being sold to the world’s most populous nation.
According to a statement from Tony Battaglene, chief executive of Australian Grape & Wine, the named companies in each investigation will need to complete a full anti-dumping and/or Countervailing Duties Investigation questionnaires, at which point they are expected to have between 30-37 days to respond to the MOFCOM.
“We will continue to support and work with the named companies and assist their efforts to respond to MOFCOM’s investigation,” Battaglene said.
Australian Prime Minister Scott Morrison has rejected any suggestion that Australian wine is subsidised or dumped in China, amidst fears it could dent exports worth more than $1 billion a year to the nation.
“We completely reject any suggestion that Australian wine is subsidised,” Morrison told Seven’s Sunrise program in August.
“We completely reject any suggestion that there is dumping of Australian wine in China.”
Wine Australia and the Australian Grape & Wine will be providing regular updates on an investigation by China of wine dumping allegations, which could hit exports in 2020-21.
