China still has its claws out when it comes to Australian wine despite the fact that there’s an obvious market for Australian red wine in China, says wine columnist RICHARD CALVER.

There was a young lady of Niger
Who smiled as she rode on a tiger;
They returned from the ride
With the lady inside,
And the smile on the face of the tiger.

IN this year of the Tiger, China still has its claws out when it comes to Australian wine.

That Tiger Stance (which is a real thing in taekwondo, also called the Cat Stance or beom seogi) is despite the fact that there’s an obvious market for Australian red wine in China.  

This is epitomised in the early September report by “Vin Joy News” that Chinese customs authorities in Gongbei, Guangdong seized RMB 35 million (about $A7.5 million) worth of smuggled Penfolds wines that were “funnelled” from tax-free Macau to mainland China.  

The report reveals that demand for high-end wines is still present; it says that “photos released by Gongbei authorities showed bottles of Penfolds Bin 389, RWT Bin 789 and Bin 407, which sells for RMB 1119 ($236), RMB 1855 ($390) and RMB 1448 ($313) respectively.”  These are excellent prices. 

Compare the 389 “baby Grange” price here at Dan Murphy’s where a member can get it for just over $85 a bottle (the 2019 vintage). 

These prices are even more starkly good when you consider the basis on which China imposed around 200 per cent tariffs (more precisely, anti-dumping security deposits) on the import of Australian wine.  

The deposit tariffs on wine to mainland China are in place for five years (from March 26, 2021). It is alleged that Australia dumped cheap wine.

In July, Wine Australia reported that total Australian wine exports declined by 10 per cent in volume to 625 million litres and 19 per cent in value to $2.08 billion in the year ended June 30. Don’t you love bureaucrat speak?  

The media release telling us these stats says: “The decline in volume and value was not unexpected, as it was largely the result of the continued impact of the significant reduction in exports to mainland China.”

Wine Australia didn’t supply specific commentary on mainland China in the June Export Report media release, but they supplied the figures to me by email. They spell disaster in paint-by-numbers. The exports for the year to the end of June 2022 were six million litres of wine valued at $24.6 million FOB; this was a decline of 88.5 per cent in volume and a decline of 95.9 per cent in value compared to the same period last year. 

The dispute about so-called dumped Australian wine is being arbitrated at the World Trade Organization, a process that is set to take years. Anti-dumping and anti-subsidy duties are tariffs that governments impose on imports that they decide are below fair market value, usually at prices lower than the exporting countries’ domestic markets. From the example of the smuggled wine, I just told you about what seems like a pipedream. 

In this context Rachel Triggs, a Wine Australia general manager said: “The dispute settlement proceedings at the World Trade Organization continue to follow the process. The proceedings are expected to take a few years to conclude. It is something that our sector is following and we’re keeping exporters up to date as this progresses. 

Wine Australia, and the peak representative organisation for the Australian wine sector Australian Grape & Wine, are working in close collaboration with the Australian government to monitor and support the sector’s interests during this time.”

Meanwhile Wine Australia has closed its Shanghai office, a decision that, again quoting Ms Triggs, “was based on the current environment and market opportunity”. 

Question: What’s the only animal that can go into and then out of a tiger’s den?  Answer: A tiger.