China launches anti-dumping investigation into Australian wine imports

China has begun an anti-dumping probe into Australian wine imports, marking the latest escalation of tensions between the two countries.

The investigation by China’s commerce ministry will look at 2019 imports of wine from Australia in containers of two litres or less, the ministry said in a statement cited by Reuters.

The news caused shares of Treasury Wine Estates, Australia’s biggest winemaker, to fall by as much as 20% amid fears of a possible imposition of an import tax on the country’s wine.

The China Alcoholic Drinks Association requested the inquiry, claiming that Australian producers had cut prices and were taking market share from local companies, according to Reuters.

The Association reportedly asked the regulator to look into ten producers, including Treasury and Accolade Wines.

Imports of Australian wine into China more than doubled between 2015 and 2019, the Association said, while the price of imports fell 13%.

The organisation said that the market share of domestic wine fell from 74.4% to 49.6% during the same period.

The inquiry follows a deterioration in diplomatic relations between the two countries, after Canberra called for an independent inquiry into the origins of Covid-19.

China – Australia’s largest trading partner – recently imposed dumping tariffs on Australian barley and halted beef imports from four Australian firms.

In a news briefing, Zhao Lijian, a spokesman for China’s foreign ministry, rejected speculation that this latest move was politically motivated.

“This is a normal case of anti-dumping, please don’t draw unnecessary associations,” said Lijian, cited by Reuters.

He also said that China will carry out the investigation in a “fair and just way, according to the law”.