China fired another shot in its bitter trade and diplomatic dispute with Australia Tuesday by launching an anti-dumping investigation into imports of Australian wine.
China’s Ministry of Commerce ays the probe was being launched at the request of the China Alcoholic Drinks Association, which alleges that Australian wine producers have sharply cut the price of the products they were selling in China, subsequently damaging China’s domestic wine industry.
The ministry says the investigation will last for one full year, with the possibility it could be extended another six months until February 18, 2022.
Beijing’s announcement of the anti-dumping probe caused shares of Australian-based Treasury Wine Estates, the world’s biggest standalone winemaker, to fall by as much as 20% at one point Tuesday before they were briefly suspended from trading, and were down 13% in afternoon activity.
China is the leading market for Australian wine exports with over $790 million in sales last year for a 37% market share, with France a distant second at 27%.
Treasury Wine Estates issued a statement saying it would cooperate with any requests for information made by either Chinese or Australian authorities.
Australian Federal Trade Minister Simon Birmingham called Beijing’s probe “a very disappointing and perplexing development.”
The anti-dumping probe is the latest move in China’s apparent retaliation over Australia’s push for an independent probe into the origins of the novel coronavirus pandemic, which was first detected last year in the central Chinese city of Wuhan.
Beijing has imposed heavy tariffs on Australian barley and suspended Australian beef imports, and has also advised its citizens and students to reconsider Australia as a destination for travel and education, citing racial discrimination.
China is Australia’s largest trading partner, with two-way trade worth $170 billion last year, according to Reuters.