Australia's largest wine company, Treasury Wine Estates, says its imports into China will be slugged with a massive 169.3 per cent tariff, and it will implement emergency measures to minimise the damage.
Trade relations between Australia and China deteriorated even further late last week after Beijing imposed crippling import taxes, ranging from 107 to 200 per cent, on all Australian wine.
The move followed the preliminary findings of a Chinese anti-dumping investigation, which claimed Australia was unfairly subsidising wine exports, and causing China's winemakers "substantial harm".
Treasury Wine Estates said it expected demand for its wine in China to be "extremely limited" from now on.
On Friday Treasury had placed its shares in a trading halt after a panic sell-off led to its value dropping 11.3 per cent.
Its shares are now trading again and by 10:20am AEDT had plunged by a further 7.9 per cent to $8.50.
The winemaker, known for its brands Penfolds, Wolf Blass, Lindeman's and many others, said the Chinese market accounted for two-thirds of its sales to Asia, and 30 per cent of its earnings.
"We are extremely disappointed to find our business, our partners' businesses and the Australian wine industry in this position," chief executive Tim Ford said in a statement to the ASX.
"We will continue to engage with MOFCOM [the Chinese Ministry of Commerce] as the investigation proceeds to ensure our position is understood.
"We call for strong leadership from governments to find a pathway forward."
Under Treasury's contingency measures, it will "reallocate" its Penfolds Bin and Icons ranges from China to other luxury growth markets with "unsatisfied demand".
That includes Asian countries outside of China, Europe, the United States and domestically in Australia.
The winemaker will also spend more on sales and marketing to drive demand in those regions, and expand its distribution footprint there.
Under its new plan, Treasury will engage in cost-cutting, while reallocating its luxury grapes to its other brands like Wynns, Wolf Blass, Seppelt and Pepperjack, which it says have been "significantly supply-constrained over recent years".
Under China's anti-dumping regulations, initial tariffs will last for up to four months (until March 28, 2021), and under "special circumstances", may be extended to nine months (August 28, 2021).
https://news.google.com/__i/rss/rd/articles/CBMiY2h0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDIwLTExLTMwL3RyZWFzdXJ5LXdpbmUtZXN0YXRlcy10YXJpZmYtY2hpbmEtaW1wb3J0cy1wZW5mb2xkcy8xMjkzMzcyMtIBAA?oc=5
2020-11-29 23:41:00Z
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