Australia's wine war with China may be escalated to the World Trade Organisation after the country announced it would continue massive tariffs on some winemakers from Down Under.

On Friday, China's Ministry of Commerce confirmed it would impose "anti-dumping measures on some Australian wine imports from March 28 for (another) five years".

China has previously accused Australian wine producers of "dumping", or lowering prices below the cost of manufacturing in a bid to increase market share in its gigantic economy.

Beijing has accused the federal government of subsidising Australian wines in order for them to be exported and sold cheaply in China.

Those suspicions prompted China to introduce a four-month tariff of up to 200 per cent as part of anti-dumping measures.

Australian Grape and Wine chief executive Tony Battaglene said the tariffs were even higher than 200 per cent.

"We're probably up to the 215 to 218 per cent mark," Mr Battaglene told the ABC recently.

Penfolds Grange, a high-end Adelaide shiraz, is a sought-after wine in China.
Penfolds Grange, a high-end Adelaide shiraz, is a sought-after wine in China.

"Honestly, it doesn't matter. When you're at 200 per cent you're not viable and when you're at 215 per cent, you're even less viable so the market remains closed to Australian wine."

Federal Trade Minister Dan Tehan has previously rejected suggestions Australia's wine industry was subsidised by the government.

Department of Foreign Affairs and Trade officials told Senate Estimates the value of Australian trade with China for almost all industries had plummeted by 40 per cent.

Wine exports have sank to less than $1 million in January, from a peak of $164 million last October - before the tariffs were introduced.

Once the tariff extensions are confirmed, Australian wine industry officials are expected to request the federal government refer the dispute to the World Trade Organisation.

"We continue to reject the allegations," Mr Battaglene said.

"For us, China is someone who continually promotes the importance of the World Trade Organisation, so we'll certainly evaluate very carefully the possibility of challenge through that."

Originally published as China deals fatal blow in Aussie war


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