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Alarm in Bordeaux's vineyards
Aggregated Source: Shanghai Daily: Business

FEARS of an EU-China trade war mounted yesterday after Beijing launched an anti-dumping investigation into European wine imports in a move greeted with alarm in the vineyards of Bordeaux.

The announcement of the wine dumping probe came a day after the European Commission imposed anti-dumping duties on solar panels imported from China.

China is Bordeaux's biggest export market and takes around one in five of the bottles produced in the renowned area, where up to 55,000 jobs depend on the sector.

"We are taking this very seriously," Allan Sichel, the president of the Bordeaux wine merchants federation, said.

"We are not yet at the stage of retaliatory measures but that could be the outcome.

"Bordeaux is the leading wine imported into China, so it is Bordeaux that will be hit the hardest. It could have enormous repercussions, for stocks and for prices, with the possibility of significant drops which would be catastrophic for the majority of wine makers."

France had urged its EU partners to stand up to China on allegations of selling solar panels below cost in a bid to corner the European market.

The 27-nation EU was divided over the decision to launch a dumping probe with Germany calling for dialogue rather than confrontation.

German government spokesman Steffen Seibert said his country would work to de-escalate the trade dispute and avoid the imposition of permanent tariffs.

"It's not in the interest of Europe, Germany or China, to aim for a trade dispute. That's why Germany will work with the EU Commission, so that the EU Commission in close dialogue with China finds a mutual agreement," he told reporters.

According to Commission figures, China bought 763 million euros' worth of wine from Europe last year, of which 546 million came from France, 89 million from Spain and 77 million from Italy.

The Chinese wine market is of enormous importance for producers around the world. Regarded by many in the industry as the answer to a global glut, it is only in its infancy, with imported wine still the preserve of a tiny minority of the 1.3 billion population.

A Commission spokesman in Brussels said China was entitled to start an investigation but insisted there was no basis for it. "We do believe that there is any such dumping or subsidies when it comes to the export of wine to China," he said.

Although the EU does not subsidise exports of wine directly, it does provide support to producers through a variety of programs which could arguably be viewed as having no impact on the prices they can afford to sell at.

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