by Staff Writers
Shanghai (AFP) Aug 22, 2012
A European business group on Wednesday criticised Chinese calls to probe EU wine imports as "protectionist", as a dispute between the major trading partners threatened to escalate.
The China Alcoholic Drinks Industry Association this week formally requested the government to investigate whether wine from the European Union was damaging the domestic market.
China's commerce ministry is now considering whether to take action following the request, which made claims of unfair European subsidies to its industry, state media reported.
The EU Chamber of Commerce in China called the developments a "worrisome trend of trade protectionism".
"We strongly oppose such protectionist measures," said Zhang Qi, the vice chair of the chamber's agriculture, food and beverage working group.
"No doubt, both China and the EU will suffer from a trade dispute over wine, while Chinese wine lovers and consumers would be the biggest victims," Zhang said in a statement.
Experts said the request followed a flood of cheap imports of bulk and bottled European wine, including from Spain, last year.
Europe, China's biggest trading partner, exports an estimated one billion euros ($1.2 billion) worth of wine and spirits annually to the country.
The EU chamber said possible moves by China against alleged "dumping" and other retaliatory measures would hurt free trade and efforts by Chinese producers to improve quality.
China is seeking to build its own wine industry. Much of the wine made in the country has until recently been mass-produced and of low quality, but there are now some good Chinese wines being sold.
"The possible trade remedy measures will limit competition and distort trade. This is not a definite way to lead the improvement of wine quality for domestic wine producers," the chamber said.
Jim Boyce, operator of China-focused wine blog the Grape Wall of China, said Chinese winemakers find it difficult to compete against imported wines.
"Countries like Spain and Chile and Australia can make a lot of very reasonably good, super-cheap wine and China is still on the quality curve," he told AFP.
"It's hard for the mass-produced Chinese winemakers to compete against that, at that quality level."
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