China delivers second hit to Aussie winemakers


China has hit Australian winemakers with a second investigation threatening the $1.07 billion trade by alleging the industry is unfairly subsidised by the government.

The Chinese Government has pointed to loans for cash-strapped farmers crippled by drought, funding for sustainable water and regional innovation projects as proof Australian winemakers have an unfair trade advantage.

It's the second investigation launched this month after Beijing announced a probe into wine on the basis exporters were "dumping" large amounts into the Chinese market.

Trade Minister Simon Birmingham indicated earlier this month the government was expecting the anti-subsidy investigation to come, and has rubbished the suggestion.

"Australian wine is highly sought after in China because of its quality," he said.

"Australian wine is not sold at below market prices and exports are not subsidised."

Mr Birmingham said the federal government would "stand" with the Australian wine industry to "uphold their integrity and hard earn reputation".

"Our wine industry has worked incredibly hard to establish itself as a world-leading producer and export powerhouse," he said.

In a statement the Chinese Ministry of Commerce confirmed on Monday it had received a request for the investigation from the Wine Industry Association of China.

The Ministry said it has issued an invitation to the Australian government for "consultations on countervailing investigations".

The Chinese Government alleges there are up to 40 government subsidies that "may benefit the Australian wine industry".

The wine industry is bracing for potential struggles if China imposes restrictions on imports. Picture: Rob Leeson.
The wine industry is bracing for potential struggles if China imposes restrictions on imports. Picture: Rob Leeson.

These include government-funded conservation projects, funding for sustainable water infrastructure, concessional drought loans and dozens of regional innovation programs.

The investigation will cover exports from 1 January 2015 to 31 December 2019, and is focused on bottled wine.

Mr Birmingham has not yet been able to speak to his Chinese counterpart despite a "standing" offer to do so.

"We remain ready to have dialogue because we believe the best way to work through difficult issues is for parties to sit down in a mature way and address those issues upfront, openly, honestly," he said this month.

China has previously used drought loans and funding for water projects to justify enormous 80 per cent tariffs on Australian barley.

Despite the federal government presenting clear evidence the products were not subsidised, their arguments were ignored meaning barley farmers are effectively now blocked from the Chinese market due to the high tax imposed. 

Originally published as China delivers second hit to Aussie winemakers