China has turned the wine industry on it’s head today as it announced massive tariffs on Australian wine of up to 200%. This tariff will be a big blow to the industry that is worth $1.2 billion and with the tariff having immediate effect. China accounts for around 40% off Australian wine exports.

The tariffs were introduced after China conducted it’s own investigation into the dumping behaviour of Australian winemakers. Dumping is a practice where companies with excess stock, fill the market with wine at prices which are lower than the cost to produce it. China’s investigation found that Australian winemakers undertook this behaviour which in turn caused suffering to local Chinese producers. The investigation is not due to end until next year however the Chinese government has decided to impose an early and temporary anti-dumping security deposit.

These deposits will behave in the same way as tariffs and will range in value from 102 per cent to 200 per cent.

This tariff signals an escalation in the souring relationship between Australia and China with the Chinese ministry already putting out advice to suspend orders of six categories of goods coming from Australia.

Many publicly listed Australian wine companies have seen their share prices plummet on the news this morning.

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