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July 2013

China penalizes European wines

Carmen Benítez. Journalist @cabeherrero

According to the European Union, solar panels from China are being sold below cost, a process known as dumping. As a result, these products have been subject to a punitive duty of 11.8% until August 6th, which could rocket to 47.6% if the situation is not rectified. Days after this sanction was imposed, the Chinese government opened a year-long investigation into wines imported from the European Union. China believes that European wineries are also engaging in dumping and are receiving unfair subsidies.

The China Alcoholic Drinks Industry Association requested the investigation, which could last until January 1st, 2015. Markus Ederer, EU Ambassador to China, expects the conflict to be resolved quickly due to the “excellent quality of European products”.

The Spanish Wine Federation is indignant, and believes that China has taken these measures as retaliation for an issue which has nothing to do with the wine sector in Spain and in Europe.

The European wine sector, though subject to a common market organization, operates in a free market with no price support. Sales to China have increased in the last six years and average export prices have increased three-fold, “with a focus on positioning and, therefore, with no involvement in dumping,” according to the Spanish Wine Federation.

Last year, China imported 430 million liters of wine, almost 70% of which came from the EU. Spain is the third-leading wine exporter to China in terms of volume, behind France and Australia. In the first quarter of 2013, Spain exported 7.9 million liters of wine to China, valued at 20.1 million euros, i.e. 53% more than in 1Q12.

The disputes continue. The European Union has also opened an investigation into alleged anti-competitive behavior by Chinese producers of stone used for counter tops and tiles. We’ll have to wait and see how China responds.

As from July 1st, companies that export to China can fill out forms available on the Spanish Wine Federation’s website with a view to cooperating with the Chinese authorities.

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