Recently, Australian Grape Wine (the national representative body for the Australian wine industry of the Australian Grape and Wine Corporation (AGW)) indicated that it is preparing a proposal to the Chinese Ministry of Commerce (MOFCOM) to initiate a price commitment in China on behalf of the Australian wine industry as an interim measure pending the final determination of the anti-dumping/countervailing investigation. The price commitment would require producers to commit to a five-year term of five years. The price commitment would require producers to commit to sell above a certain price to China for a period of five years and, if accepted, would not be subject to interim duties.
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However, if dumping is ultimately found not to be established, this commitment will automatically expire.
According to AGW, this commitment is not an admission that dumping is established, and the price commitment will not affect the winery"s chances of successfully defending the case.
Kensington Wine Public says the agency has suggested that AGW would be more likely to receive Commerce Department participation if it submitted a price commitment proposal on behalf of the industry. The Department of Commerce has advised that it will consider requests from Australian grape and wine companies. Participation in the price commitment proposal is a voluntary act. Wineries/exporters wishing to participate will be required to provide a Power of Attorney (POA) to AGW.
AGW believes that the price commitment submitted must be reasonable and attractive in order for the Department of Commerce to consider its acceptance, and offers two recommended options.
Option 1: MOFCOM adds 10% to the injury price to the domestic industry [essentially the average selling price of the domestic product (as determined by MOFCOM)] as determined in the PD: i.e., no less than A$8808.60/1000 liters.
Option 2: Use the average export price of Australian wine in 2019 multiplied by the current dumping margin of 212.10%: i.e. not less than A$29,968.40 per kilolitre.
The AGW statement said there is no guarantee that the two proposals will be accepted by the Chinese Ministry of Commerce, but the price commitment proposal could be a constructive effort that, if successful, could help alleviate the current difficulties faced by the Australian wine industry in exporting to the Chinese market.
It is understood that this power of attorney needs to be submitted by January 10, and AGW is currently awaiting the attorney's authorization document format before sending it to exporters/wineries interested in participating in the price commitment.