New Chapter of Wine Industry in China: China Lifted Anti-Dumping Duties on Australian Wine

Recently, China’s Ministry of Commerce (MOFCOM) released Notice No. 11 of 2024, marking a landmark decision to terminate the imposition of anti-dumping duties on wine imported from Australia. This signifies a potential new chapter for the Chinese wine industry, as Australian wines previously held a considerable share of the market. This article delves into the regulatory background of this issue, the market share of wine in China, and the possible industrial influence.

Regulatory background

Following the enactment of the China-Australia Free Trade Agreement (ChAFTA) in 2015, import duties on Australian bottled wines were lowered several times. As of January 1, 2019, China's import tariff rate on Australian wine was eliminated completely, while countries such as France, Italy, and Spain maintained the tariff rate of 14%.

On August 18, 2020, MOFCOM commenced an anti-dumping investigation into imported Australian wines in containers holding 2 liters or less. The preliminary findings, announced on November 27, 2020, led to the imposition of temporary anti-dumping measures.

Subsequently, on March 26, 2021, through Notices No. 6 and No. 7, MOFCOM imposed anti-dumping duties on imported wines in containers holding 2 liters or less originating from Australia. Effective from March 28, 2021, these duties were anticipated to last five years. The anti-dumping tax rates for various companies were set between 116.2% and 218.4%.

Fast forward to November 30, 2023, MOFCOM released Notice No. 52, initiating a reassessment of anti-dumping duties on imported Australian wines. Afterwards, in a revelation on March 28, 2024, the Ministry declared the cessation of the duties.

Market share of wine in the Chinese market

In recent years, the Australian wine industry has witnessed a dramatic decline in its market share within the Chinese wine import sector. According to statistics from the General Administration of Customs China (GACC), in 2019, Australian wine constituted a significant market share of 37%, ranking as the number one country of origin for imported wine. However, in 2023, this figure had diminished drastically to a mere 0.1%. This sharp decrease is attributed to the imposition of anti-dumping duties on Australian wines, resulting that the value of Australian wine imports dropped from 812 million USD in 2019 to a mere 0.59 million USD by 2023.

Source: GACC

Source: GACC

With Australia's weakening position on the Chinese wine import sector, its share has been divided among countries such as France, Chile, Italy, the United States, and Spain. In 2019, France's wine import, specifically those made from fresh grapes and stored in containers of 2 liters or less, was approximately 634 million USD, constituting 29% of the market and ranking just after Australia. In 2023, the value of French wine imports had taken the lead with 492 million USD, making up 49% of the market. Close behind were Chile, Italy, Spain, and the United States.

Future landscape of the Chinese wine industry

According to the GACC statistics, the overall import value of wine in China dropped a lot from 2019 to 2023. With China's decision to end anti-dumping duties on Australian wine imports in 2024, the return of Australian wine may inject vitality into China's relatively sluggish import wine market over recent years. The future landscape of the Chinese wine industry seems promising.

After this significant turning point, Australian winemakers are facing a crucial moment where they have a golden opportunity to repair and strengthen market relations that may have been strained during the hiatus. Treasury Wine Estates, a leading figure in Australia's wine industry, serves as a prime example of companies which aims to take proactive measures to rebuild connections and regain trust among Chinese consumers. It said it will resume the distribution of some of its products into China.

While there is optimism, the journey toward reclaiming former glory is a fraught with challenges. The Australian wine industry's quest for a strong market presence definitely faces obstacles stemming from the competitive landscape that has evolved in its absence. The diversification of consumer tastes and the emergence of alternative wine-producing nations have reshaped the market, making it challenging to swiftly return to Australia wine’s pre-tariff levels of influence. Its ability to regain consumer favor remains an unknown factor, filled with possibilities.