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Spanish wine, looking to conquer China

Teresa Sánchez

Exporting to China, an Asian giant. That's the objective that 500 Spanish wineries presented to the Chinese authorities as part of their proposal to sell their products without paying the high duties that the Government wants to implement. China accounts for 14% of total global wine consumption (17 million hectoliters per year), according to the International Organization of Vine and Wine (OIV).

The decision to impose duties on foreign wine was made in June, in response to the decision by the EU to impose duties restricting imports of Chinese solar panels for photovoltaic energy production.

The EU accused Chinese manufacturers of dumping, alleging that, with their government's support, they were selling their products below cost in Europe. China countered that EU authorities also grant subsidies for wine production, taking a similar stance.

Although the EU and China agreed in July to a floor price of $0.56 per watt of power production for imports of Chinese solar products in Europe, President Xi Jinping has not yet withdrawn his wine strategy.

China's Ministry of Commerce is investigating European wineries for dumping, wineries which exported slightly more than 800 million euros in wine to China in 2012."China is requiring wine exporters to register for inspection. There are 5,000 European wineries in total, of which 500 are Spanish. The problem is that companies that do not volunteer for inspection will have a very tough time exporting as they will have to assume impossibly high duties", says the Spanish Wine Federation.

Nevertheless, the Spanish government is optimistic. "Major efforts are under way and we trust that the situation will be resolved", says ICEX.

Spanish Prime Minister Mariano Rajoy also wanted to leverage these opportunities, signing a Memorandum of Understanding (MoU) with China's General Administration of Quality Supervision to boost sales of our wines in China.

The MoU seeks to promote joint actions to fight wine fraud and enhance traceability and cooperation to protect Protected Geographical Indications (PGIs) and Designations of Origin (DOs). To this end, one of the objectives is to develop and electronic communication system to be used by the two authorities to control certificates of origin and to prevent fraud. France, which remains the unmistakable leader in terms of value and volume, has a 1.5 billion person market with a better image, but Spain is hot on its heels.

Spanish wineries outstripped Italian ones in total wine exports to China in 2011 and surpassed them in bottled wine volume last year.

Two years ago, Spain and Italy were tied with 18.9 million liters. In 2012, exports by Spanish wineries exceeded 20.1 million tons, whereas Italian exports lost considerable ground, tumbling to 14.9 million liters. Data from ICEX leaves no room for doubt: Spanish exports of bottled wine increased by 111.5% in the last two years, trailing only France and Australia.

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01/08/2017