EU wine imports face probe

A Chinese wine association announced Monday it had filed a complaint to the Ministry of Commerce (MOFCOM), accusing wine makers in the EU of selling their products below market value and receiving unfair government subsidies.

At the request of domestic wine producers, our association has submitted a petition to MOFCOM, asking the ministry to launch anti-dumping and countervailing duty investigations into wine imports from EU, Wang Zuming, secretary-general of the wine division of the China Alcoholic Drinks Association (CADA), told the Global Times.

According to Wang, the EU is the largest wine producing region in the world, with the annual output of 16 million tons, accounting for 69 percent of the world output.

With their excessive production capacity and the huge potential of the Chinese market, the reason of EU wine makers to dump their products in China is very obvious, he said.

He also said the association has collected evidence through public channels to prove that the EU provides subsidies to its wine industry, putting China's wine products at a disadvantage.

Wang did not say when the association filed the complaints and whether the MOFCOM will launch probes into imports from EU.

Huang Minghai, director of the press office at the MOFCOM, told the Global Times Monday that the ministry has accepted the CADA's petition but has not decided to launch any probe.

The EU's wine imports to China have grown at an annual rate of 67.71 percent to reach 169,114 kiloliters in 2011 from 35,944 kiloliters in 2008. During the past four years EU has seen its market share rise to 14.76 percent from 4.94 percent, the CADA data showed.

Imports from the EU reached 41,698 kiloliters in the first quarter of this year, up 23.98 percent from a year earlier, data showed.

Almost all Chinese wine makers have felt the impact of the imports from the EU, with their performance and market share declining dramatically, Wang said.

Yantai ChangYu Group Company, a leading domestic wine brand, saw its total business revenue drop 2.51 percent year-on-year to 3.01 billion yuan ($472.6 million) in the first half of 2012, the first such decline in the last five years, and its sales dropped 5.4 percent, the company announced earlier this month.

China Great Wall Wine Co's sales dropped 2.1 percent in 2011 from a year earlier, while Dynasty Winery, a Sino-French joint venture, saw its revenue shrink 10 percent year-on-year in 2011.

"With the rising popularity of wine among Chinese consumers, many foreign wine brands including some with shoddy products have entered the Chinese market to reap profits," Wang Dehui, a wine marketing specialist at the China Wine Union, told the Global Times.

"China's wine industry is an emerging industry with great potential. Chinese government should strengthen the laws and regulations governing the wine industry to help domestic makers improve their competitiveness amid intensifying competition," Wang said.