Put a cork in it. China threatens Australia with Grape Wall

China has turned from sweet to sour on Australian wine, launching an anti-dumping investigation as diplomatic relations between the two nations continue to be glacial.

The inquiry will look into whether Australian winemakers dumped cheap bottles of wine into China over a five-year period, damaging out local producers, Australian Associated Press reported.
Trade Minister Simon Birmingham described confirmation of the inquiry as "a very disappointing and perplexing development".

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

"Australia will engage fully with the Chinese process to strongly argue the case that there are no grounds to uphold the claims being made."

Agriculture Minister David Littleproud has denied the dumping allegations.

"Australia produces some of the best quality and most popular wine in the world," he said.

"That reputation has been recognised by Chinese consumers who have helped make China our largest export market with $1.1 billion exported in 2019-20."

China is Australia's largest trading partner but several rifts have seen the relationship under strain.

China recently imposed tariffs on Australian barley, suspended some beef imports and warned students and tourists it was not safe to travel to Australia because of allegations of racism.

Shares in Treasury Wine Estates dropped by 14% as news of the investigation emerged and have since been halted from trading on the Australian Stock Exchange.

TWE, which imports premium brands such as Penfolds and Wolf Blass 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.

Umbrella body Australian Grape & Wine said it was aware of the request by the Chinese industry to the Chinese Ministry of Commerce (MOFOCM) to launch the investigation.

"Australia has a large number of exporters with close cultural ties to China," it said in a statement. "The Australian industry welcomes the opportunity to build on these ties and work with the Chinese industry and government to further technical cooperation and develop lasting relationships."