First our barley, now our booze: China launches anti-dumping probe into Australia's $6billion wine industry after Scott Morrison called for an inquiry into the origins of coronavirus
- China has launched an anti-dumping investigation into Australian wines
- It will look at whether Aussie winemakers 'dumped' cheap bottles into China
- Australian wines in China are expensive and only cheaper than NZ wines
- Trade Minister Simon Birmingham said he was 'perplexed' by the move
China has launched an anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry.
The 12-month inquiry, which could lead to huge tariffs, will look into whether Australian winemakers 'dumped' cheap bottles into China to drown out local producers between 2015 and 2019.
But Trade Minister Simon Birmingham said he was 'perplexed' by the move because Australian wines in China are expensive, and only cheaper than New Zealand's bottles.
The move comes after China threatened 'further action' last month when Canberra cancelled its extradition treaty with Hong Kong and extended visas for its residents.
Thousands fear they could be unfairly arrested under China's new national security law, but the policy only further inflamed tensions between Australia and the communist regime.
China has launched an anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry (pictured, a woman browsing wine in Beijing)
Trade Minister Simon Birmingham said he was 'perplexed' by the move because Australian wines in China are expensive, second only to New Zealand wines. Pictured: The vineyards of Margaret River Wines in Western Australia
The investigation, due to end in August next year, has struck fear into the hearts of Australian wine makers, which send 37 per cent of their exports to China.
Shares in Treasury Wine Estates slumped about 19 per cent as news of the investigation emerged.
In May, China's anti-dumping investigation into Australian barley ended with an 80 per cent tariff on the crop, which effectively prevents Aussie farmers from selling it to their biggest market.
The federal government denies dumping and is fighting the tariffs.
Trade Minister Simon Birmingham described the investigation into wine as 'a very disappointing and perplexing development'.
'Australian wine is not sold at below market prices and exports are not subsidised,' Senator Birmingham said.
Australian Prime Minister Scott Morrison is pictured meeting Chinese leader Xi Jinping last year
'Australia will engage fully with the Chinese process to strongly argue the case that there are no grounds to uphold the claims being made.'
The senator said his counterpart in China is still refusing take his calls.
Agriculture Minister David Littleproud also flatly rejected the dumping allegations and committed to working closely with industry figures to fight the claims.
The anti-dumping investigation is expected to run for a year but could last until February 2022.
China is also considering launching a countervailing duties investigation into whether Australian wine exports are receiving and benefiting from government subsidies.
Treasury Wine Estates, which imports premium brands such as Penfolds into China, said it would co-operate with the investigation.
'TWE's focus will remain on building premium and luxury brands, investing in the local operating model and team, and working with partners to enhance the wine category and grow our contribution to China,' the company said in a statement to the ASX.
Treasury Wine boss Tim Ford said only last week that he was worried about tension between Australia and China.
'Does it worry me? Of course it worries me,' he told The Australian.
'We saw it two years ago when we faced some operational challenges getting our product into China for a short period of time. We would hope that they don't happen in the future for sure.'
Police officers detain protesters during a rally against a new national security law on the 23rd anniversary of the establishment of the Hong Kong Special Administrative Region on July 1
The extraordinary tariff on Australian barley exports is an apparent punishment for Scott Morrison's push for a coronavirus inquiry (pictured, a wet market in Guangzhou on May 4)
Australia exports $1.1 billion of wine to China, out of $2.9 billion total wine exports to the world. South Australia is by far the biggest wine exporter to China, with Treasury Wines leading the pack.
Almost 46 per cent of Queensland and Victorian exported wine goes to China. The figure is 41.5 per cent for WA, 43 per cent for SA.
China is Australia's largest trading partner, buying about a third of all exports worth $135billion a year.
Beijing and Canberra have been at loggerheads after Australia led global calls for an inquiry into the origins of COVID-19, which first surfaced in China late last year.
China retaliated by slapping an 80 per cent tariff on Australian barley, suspending beef imports and telling students and tourists not to travel Down Under in an apparent attempt to damage the Australian economy.
Riot police pin down a protester during a demonstration following the passing of China's National Security Law on July 1 (pictured)
In June Scott Morrison said cyber-attacks by a state-based actor have increased dramatically in recent weeks and targeted 'all levels of government' as well as 'critical infrastructure'.
Security chiefs said the hackers are using the so-called 'spear-phishing' method to steal sensitive login details by sending scam emails, and carrying out regular 'reconnaissance' to find weak points in Australia's defences.
Intelligence sources said the attacker was China.
On July 9, Scott Morrison announced he is granting five-year visas with a pathway to permanent residency for students and skilled migrants from Hong Kong after China imposed draconian new laws on the territory.
Around 10,000 Hong Kongers who are already in Australia are able to apply for the extended visas but is no humanitarian immigration programme specifically for Hong Kong residents.
Scott Morrison (pictured in 2019 at the G20 summit) has pushed for an independent inquiry into the origins of the coronavirus outbreak
Riot police secure an area inside a shopping mall during a rally on July 21 in Hong Kong (pictured)
The Prime Minister has also suspended Australia's extradition treaty with the former British colony, meaning Hong Kongers accused of a crime by their home government will not be automatically deported from Australia.
Canada, the UK, the US and New Zealand have done the same.
The government is also planning measures to persuade Hong Kong entrepreneurs and businesses to relocate to Australia, with further details yet to be announced.
China's new national security law prohibits what Beijing views as secessionist, subversive or terrorist activities or as foreign intervention in Hong Kong.
Critics say it curtails freedom of speech and pro-democracy protesters have since been charged for holding flags, posters and pamphlets.
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