China announces probe into EU wine imports

China has announced a formal anti-dumping probe into wine imports from the European Union, as trade tensions between the two sides rise. The Chinese Ministry of Commerce said earlier this week the investigation will determine whether European wine makers are dumping their products into China and receiving government subsidies.

China's rapidly expanding middle class has a growing thirst for European wines - and according to domestic wine dealers - "this" low cost wine poses a great challenge to their business. And the Ministry of Commerce is starting to investigate.

Zhu Dongfei, Chairman, Sino-Overseas Famous Chateaux Fine Wine Assoc., said, "With the rapid increase of inexpensive foreign wine imports to China, China's wineries are facing increased pressures from declining revenues."

Some analysts view the move as a series of responses to the EU's probe of China's solar panel exports. The European Union levied punitive tariffs on Chinese solar panels last month, and has warned the duties will rise further unless a solution is reached by early August. But the Ministry of Commerce says it's not a retaliatory response.

Liu Danyang, Deputy Director, Fair Trade Bureau, MOFCOM, said, "The investigation on the EU wine follows the related laws and procedures in China, and obeys the principles of openness, fairness and transparency to conduct the normal trade investigation, It is not retaliatory measures against the EU's ruling over Chinese solar power products."

Official figures show that the EU wine imports increased from just over 6 million liters to almost 26 million liters from 2009 to 2012, almost a four times jump. Moreover, the EU accounted for more than two-thirds of Chinese imports, with France being the biggest exporter from the bloc.

The Chinese commerce ministry said the investigations would last for a year, or EVEN longer. No matter what the result is, wine dealers in China are expected to make adjustment in response. and as a consequence, the wine from EU may eventually lose its share, if not the dominance, in this huge market.