Ministry of Commerce has accepted application of anti-dumping probe into EU wine

China Wine Industry Association on behalf of domestic wine industry submited recently an application to the Ministry of Commerce, requiring an anti-dumping and anti-subsidy investigation into imported wine originally from EU. Now, the Ministry of Commerce has accepted this application, but has not yet officially started investigation.

"Chinese consumption market has shown great potential and EU wine enterprises are exporting wine to China with prices lower than costs", said Wang Zuming, Secretary General of Wine Club at China Wine Industry Association

Currently, traditional wine producing countries in worldwide all suffers with serious excess production capacity. As a result, rapidly growing Chinese wine market attracts attention from all over the world that foreign wine took about 23% of overall domestic consumption in 2011 from less than 5% several years ago.

In recent years, wine imported from EU increases dramatically in Chinese market from 35,944 kiloliter in 2008 to 169,114 kiloliter in 2011 with an average annual growth rate of 67.71%, taking about 14.32% of Chinese market share in 2011, which in 2008 was only 4.94%. Moreover, in the first quarter of 2012, wine imported from EU has reached 41,698 kiloliter with a year-on-year growth of 23.98%.

"In fact, almost all Chinese local wine enterprises have felt serious threats from wine imported from EU that their business conditions, performance and domestic market shares have all deteriorated significantly", said Wang.

Latest data reveals that the rapidly growing industry doesn't bring corresponding profit to Chinese enterprises. In the first half of 2012, the overall output of Chinese wine enterprises is about 608,500 kiloliter, increasing by 17.51% year-on-year. The net profit, however, is only 2.52 billion yuan, decreasing by 12.37% year-on-year. Furthermore, the industrial gross profit rate is 27%, dropping 5.7% year-on-year.

"We have collected abundant of proofs to prove that EU provides a large amount of subsidies for its wine industry, which leads to the fact that Chinese local wine enterprises now are located in a very adverse status in the competition with wine imported from EU", said Wang.

However, as China lacks of relevant anti-dumping operation experiences, experts are worrying about this case.