China targets Australian wine industry

[Waiters Friend]

https://www.msn.com/en-au/news/world/china-t ... d=msedgntp

This may have lots of repercussions locally. Coincidentally, the Federal Government yesterday issued a tender for grants (up to $25,000 each) to assist small and medium sized producers to expand their export markets.

[JamieBahrain]

We need them to buy our wines etc - so we can buy missiles etc to fight them.

[phillisc]

We need them to buy our wines etc - so we can buy missiles etc to fight them.

Cheers Craig
PS...2018 707 sold out everywhere, perhaps that's the missile being sent

PPS...see that Adelaide local rag In Daily is running the story as well, TWE having a bit of a share market correction (RRP should be up next) and the following story is that Stonehaven in Padthaway is up for sale again. Could never understand why a $20M monolith was built in the middle of nowhere, with next to nil CD trade adjacent to a town of just 400 largely transient people. Wonder what a white elephant is worth?

[felixp21]

it's simply tit-for-tat by the Chinese.

half-witted ScoMo needs to realise that Chinese ain't dumb.
Aussie wine exports in serious trouble, if you have shares in the wine industry, get rid of them!!!

[Mahmoud Ali]

We need them to buy our wines etc - so we can buy missiles etc to fight them.

Shock, horror, indeed

[Rory]

A couple of points from an exporter to China:

1. The majority of wine I have been asked to supply by my Chinese contacts is "cheap" i.e: around $2 or less a bottle to them. Thats what they haggle for.
2. You cant "dump" a product into a market unless they are buying it/ asking for it.

Typical politics, trying to scare the higher priced exporters.

[Dragzworthy]

A couple of points from an exporter to China:

1. The majority of wine I have been asked to supply by my Chinese contacts is "cheap" i.e: around $2 or less a bottle to them. Thats what they haggle for.
2. You cant "dump" a product into a market unless they are buying it/ asking for it.

Typical politics, trying to scare the higher priced exporters.

The whole thing is ridiculous. Nations only get upset on doing when they have a domestic industry that is hurt by such cheap pricing. In the case of China, this is ludicrous.
The whole thing is just tit for tat (as someone said above) given the south Australia spying story.

[JamieBahrain]

CCP are tyrannous bullies. The Chinese folks I know love a glass of Aussie red at night with their Aussie beef whilst their infants have trusted baby formula. Whilst pondering an Australian property buy. Felix is right, Chinese decent folk are smart, they know anything from their own soils was poisoned long ago.

Geo-political irony of the wine & missiles comment lost on the expected.

Tonight I proudly bought some Bindi from a shop in China. Cheers!

[wiggum]

Many have said over the last couple of years putting all your eggs in one basket Is not a smart move. Well TWE (see Penfolds for one) appear to have done that..... at least that what it looks like to the lay person. And on top of that it also looks like they have done that at the expense of the Aussie buying public. It’s hard to find sympathy here unless you have stock.

I do feel for all those employed in the industry that may be effected by this situation.

[Dragzworthy]

CCP are tyrannous bullies. The Chinese folks I know love a glass of Aussie red at night with their Aussie beef whilst their infants have trusted baby formula. Whilst pondering an Australian property buy. Felix is right, Chinese decent folk are smart, they know anything from their own soils was poisoned long ago.

Geo-political irony of the wine & missiles comment lost on the expected.

Tonight I proudly bought some Bindi from a shop in China. Cheers!

Times have clearly changed since I was a student in Beijing back in 2000...I recall the booze scene being a choice between yanjing beer, some eastern bloc vodka, Chinese baijiu (er guo tou most common) and Great wall red wine. It was a real contest to determine which would provide the least dramatic headache.

[wiggum]

Of course it has to be asked - ‘we will ever see pre 2008 prices for 389’? I hope so.

[Dragzworthy]

There seems to be a lot of dislike for Penfolds on a broad based view they abandoned their domestic customer base by jacking up prices and sending things offshore.
I admit that I've continued to buy their wine and continue to enjoy it. The 389, St Henri and Kalimna are wines I think are still decent value. One may swap the 389 and find better value in other wines like Standish at the same price....but theres still a charm about the wine and I'll buy from time to time.

[JamieBahrain]

Great Wall Red wine. When I arrived in China it was a headache and a fraud. Grapes from Chile.

[wiggum]

Me no buy anymore. QPR right out of whack

[Dragzworthy]

Great Wall Red wine. When I arrived in China it was a headache and a fraud. Grapes from Chile.

Never realized it was fraudulent..the taste was just horrific.

[Polymer]

While this is more of a political move by China..

You could argue WET makes for an anti dumping case.....Now I don't know how much (if any) cheaper wine might be..but I have seen Australian wine cheaper overseas than it is locally..not all the time but sometimes. I don't think it adds up to a significant amount and I don't think it is..but the way WET is setup, there are multiple things wrong. It is a subsidy to local winemakers. It means the domestic price might be higher than the international price. There are probably little details that makes this not a case of dumping and not in violation of their WTO commitments....

[felixp21]

Jamie, I agree with you on many, many things.
But I have to say, Great Wall, as terrible as it is, is not fraudulent. I've been to the winery on the Shandong Peninsula, thousands and thousands of acres of vines. Bloody awful stuff, but absolutely authentic. Even Chile can't grow grapes that cheap.
There are some wineries out West which are producing very promising results, I was meant to be going up there on holidays in September, but I am still stuck here in Melbourne

What a terrible year to be stuck here.... my first winter in Melbourne in 8 years, I'd forgotten how bad they are!!! Where does this infernal wind come from?????
No golf
Hawks are terrible
To be honest, just can't wait to get home!!!!!!

[felixp21]

Oh, and by the way, Polymer is absolutely 100% right. Australia has been technically "dumping'" it's wine for many years, and the Chinese are on extremely solid legal ground on this one. Simon Birmingham knows it.

[Dragzworthy]

Jamie, I agree with you on many, many things.
But I have to say, Great Wall, as terrible as it is, is not fraudulent. I've been to the winery on the Shandong Peninsula, thousands and thousands of acres of vines. Bloody awful stuff, but absolutely authentic. Even Chile can't grow grapes that cheap.
There are some wineries out West which are producing very promising results, I was meant to be going up there on holidays in September, but I am still stuck here in Melbourne

What a terrible year to be stuck here.... my first winter in Melbourne in 8 years, I'd forgotten how bad they are!!! Where does this infernal wind come from?????
No golf
Hawks are terrible
To be honest, just can't wait to get home!!!!!!

Those wineries in the west part of China sound interesting. Where abouts are they?
And yes...the hawks are terrible indeed
Pretty sure that wind is coming straight up from Antarctica

[JamieBahrain]

When I started visiting primary and secondary Chinese cities three times a week circa 2001, the 1993 Great Wall Red Wine was legendary amongst mainlanders. I can't recall why? I bought a bottle once for my crew and it was a $3 USD wine in quality. The French analysed the 1993 Great Wall Reserve Red and discovered the grapes were from Chile. It was not a cheap wine to buy, due its legendary status, so the corporate level fraud could be expected.

Ningxia is the wine region getting most comments in my circles in HKG. My wine group has done a few visits. I'm not interested. Mao's agricultural policies extended well into that province and it's known for heavy metals like cadmium ( though I'm sure their premium wine industry not so careless as to produce on tainted soils ).

Surprised you are homesick Felix. That Gulag-like Melbourne winter and lockdown, along with Comrade Dan Andrews should make you feel at home.

You are missing a belter of a summer in Hong Kong. Blue skies, no pollution, the beaches and jungles out my way have a Costa Rica feel with little industrial pollution from the north.

[GraemeG]

it's simply tit-for-tat by the Chinese.

half-witted ScoMo needs to realise that Chinese ain't dumb.
Aussie wine exports in serious trouble, if you have shares in the wine industry, get rid of them!!!

If you were hoping to make money, you'd never have bought shares in the wine industry to start with!

[marsalla]

If anyone thinks that a $350K rebate to producers under WET allows Treasury to 'dump' wine in China they are kidding themselves. This will be a disaster, and as someone who has skin in the game, it makes me sick that the 20 years it has taken to develop the Chinese market will be gone with the stroke of a pen, due mainly to Morrisons desire to talk big with Trump. There will be growers with no homes for their fruit this year, and wineries anxiously looking at their stock levels, especially as they have watched their cellar doors have to close for the last 6 months, and ontrade customers going broke owing for wine they have since drunk.

Its a wee bit shit

[JamieBahrain]

it makes me sick that the 20 years it has taken to develop the Chinese market will be gone with the stroke of a pen, due mainly to Morrisons desire to talk big with Trump.

Marsalla

As a small promoter of Aussie wine in Hong Kong I'm very sympathetic to any upcoming business hardship. But will it really be gone in a stroke of a pen? We just don't know yet.

A reliance on China was always high risk. In the last few years this risk has escalated with policies of economic coercion. Whatever side of politics you are, you can not close your eyes to what has gone on in the last year, with a universally aggressive China on the rise. To suggest otherwise is expedient or that brand of annoying Aussie partisan politics.

[JamieBahrain]

On the 25K grant, a few small guys should band together and look at direct sales in markets like Hong Kong. Resist the temptation to rip folks off. If you need to move your wine there's a market for good Aussie wine up this way.

Export is tax free. Import HKG is tax free. We know the cost of transport. Wines should be offered below what you sell them in Oz for.

[tarija]

Oh, and by the way, Polymer is absolutely 100% right. Australia has been technically "dumping'" it's wine for many years, and the Chinese are on extremely solid legal ground on this one. Simon Birmingham knows it.

Care to explain how a specific wine company with a branded good can dump?

Would have thought that dumping can only apply to a generic commodity, like iron ore.

I don't see how a branded good (eg Penfolds Koonunga Hill) placed cheap into China could be construed as dumping. Penfolds is within their right to price competitively in China in order to build its market.

[Matt@5453]

a more personal slant on the specifics

"AUSTRALIAN WINERY IN CHINA’S SIGHTS ‘FLABBERGASTED’"

[url]https://wbmonline.com.au/australian-winery-i ... FTxI9woQRM[/url]

[JamieBahrain]

Thanks Matt

Would love to hear of small quality producers who have made inroads into China and if they will be affected?

I met Alistair Ashmead ( Elderton ) in Shanghai years ago. Their's is the type of winery I'm wondering about? But they produce high quality in smaller numbers so alternative markets may be easier to find? UK & Hong Kong perhaps, the USA if the dollar low enough.

[Jimmya]

To be honest felix, i cant wait for you to go home either

[mjs]

Not sure that my experience of buying Penfolds Rawsons Retreat in a supermarket in Zhuhai for $30/b in 2015 for a low key dinner with Chinese colleagues, was an example of “dumping”

[felixp21]

Not sure that my experience of buying Penfolds Rawsons Retreat in a supermarket in Zhuhai for $30/b in 2015 for a low key dinner with Chinese colleagues, was an example of “dumping”

probably best then that you go read about dumping. I'm not being rude, but best you have a look at the definition. Wine exports are WET and GST free, it really doesn't matter how much the retailer in China is ripping you off, it's much more about how much the importer is getting the product for.