Probe into EU wine imports announced

China officially announced Monday the start of a probe into wine imports from the EU to decide whether European wine makers are dumping their wine products in the Chinese market and receiving illegal government subsidies.

In a statement published on its website, the Ministry of Commerce (MOC) said Monday it has decided to launch anti-dumping and countervailing duty investigations into wine imports from the EU at the request of the China Alcoholic Drinks Association.

The request was filed on May 15 and the ministry informed the Delegation of the European Union to China on June 5, the statement said.

On June 4, the EU had announced it would impose an interim anti-dumping duty of 11.8 percent on imports of all Chinese solar panel products from July 4.

MOC officials said the probe was a fair-trade investigation rather than a tit-for-tat response to the EU's preliminary ruling on Chinese solar panels.

China imported 257,000 kiloliters of wine from the EU in 2012, worth $1.04 billion. The country's wine imports from the EU rose by an average of 59.83 percent annually between 2009 and 2012, according to official Chinese data.

"Wine imports from the EU accounted for 65.16 percent of the total wine imports in China in 2012. The majority of the imports cost less than 3 euros ($3.91) per bottle," Wang Dehui, a wine marketing specialist at China Wine Union, told the Global Times Monday.

"Among the low-cost wine imports from the EU, those costing below 1.5 euros per bottle make up a large proportion. The low cost of wine from the EU poses a great challenge to domestic wine," Wang said.

Major domestic wine makers have seen a dramatic decline in revenue and profits in the last two years.

Yantai Changyu Pioneer Wine Co, a leading domestic wine producer, reported a 6.77 percent decline in business revenue year-on-year in 2012, and a drop in net profit of 11.1 percent year-on-year.

Domestic wine brands China Great Wall Wine Co and Dynasty Wines also saw a substantial decline in profits in 2012.

"Consumers will switch to domestic brands if the prices of imported wine rise," Wang noted.

The European Commission, the EU's executive body, did not respond to a request for comment on the wine probe by press time Monday.

The wine investigations are expected to end by July 1, 2014, but they could be extended to January 1, 2015, MOC said.