Cult Wines Ltd co-director Tom Gearing appearing on Consumer News and Business Channel (CNBC)

Posted by Helen Tate on 29 July 2013

One of the most covered wine new stories of the last few months has been the trade dispute between the EU and China, and its consequential effect on the wine industry.

It was this subject that Tom Gearing, co-director of Cult Wines Ltd spoke of on Consumer News and Business Channel (CNBC), midday last Friday. CNBC is recognised as the world leader in business news and supplies real-time financial market reports and business information to roughly 390 million homes worldwide, including more than 100 million households in the United States and Canada.

The interview revolved around the trade disputes effect on the wine industry, which was initially sparked by the EU imposing provisional anti-dumping duties averaging 57.6 percent on imports of Chinese solar panels, wafers and cells, set to take effect in August. Chinese solar panel production quadrupled between 2009 and 2011, and The European Commission claimed that China had been dumping its solar panels for less than production costs in Europe. In retaliation, China's commerce ministry piloted an anti-dumping investigation into wine exports from Europe, claiming that EU subsidies have allowed European wine producers to make wine, at a cost that is un-feasible in China. Which, in turn, it was claimed compromised wine production in mainland China.

Tom was asked for his opinion on the trade disputes effect on the wine industry, to which he began by explaining that it was merely 'political posturing', and that there hasn’t been much of an impact on investment grade wine. This is due to the fact that the vast majority of fine wine enters through Hong Kong, therefore will not be particularly affected by the tariff. Tom also highlighted that domestic wine production in China falls into the $5-15 bracket, found in supermarkets, and is therefore not synonymous with investment grade wines. The interview then goes onto discuss the influence of the Chinese market on prices, specifically Bordeaux. Tom also offers his prognosis on the potential demand for wine in China.

Following Tom’s interview on Friday, China and the European Union settled a deal on Saturday to quash the dispute. The agreement involves Chinese manufacturers accepting that they will sell domestically produced panels at a minimum ‘near spot market’ prices.

As of today, the European Union have agreed there is a "window for discussions" to try to subdue claims that Europe is dumping wine in China, according to the EU trade chief.

"There is a window for discussions between the European Union and Chinese (wine) producers," EU Trade Commissioner Karel De Gucht told a news conference. "The Chinese government has promised to facilitate such discussions," he said.

EU and Chinese diplomats have hypothesised that the wine dispute, and another conflict over EU exports of polysilicon - a raw material for solar panels –will be abandoned as a goodwill gesture.

However, China's commerce ministry was not able to confirm any halt to the investigation, as reported today by the People's Daily.

In addition, a lawyer representing the Chinese industry association that lodged the wine complaint stated that the firm had not received any notice on the freezing of the probe, the website www.people.com.cn said.

"The relevant investigation is still proceeding regularly," Yao Fengwen, a lawyer with Bo Heng (Beijing B&H Associates) law firm, told the site.

Source: www.reuters.com

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