The Mammoth EU & China Wine Dispute: Over at Last

The last month has seen global powerhouses Europe and China embroiled in a fierce dispute over wine exports, amongst other types of exports. Now that the dispute has been resolved, what does this mean for the international wine industry?

At Ideal Wine Company we recognise the emerging power of China. It’s hard not to; increasingly they have come to dominate every international industry in which they trade. They have grown to such an extent that they are now the second largest economy in the world. Only the US is larger.

That is why it is not surprising that China has become an important part of the global wine trade as well. It may not be known for the wine it produces; we don’t have any on the Ideal Wine Company product list at present. However, it is now a very large consumer of wine. Due to tradition, the Chinese population have a preference for red.

From this we can ascertain that any dispute over wine exportation would have a knock on effect on the international trade.  That’s just what happened.

Last year the dispute began when the EU countries objected to China flooding their market with Chinese solar panels. The dispute intensified when EU officials announced that they were imposing tariffs on Chinese producers of solar panels.

The very next day, the Chinese struck back with exportation restrictions on polysilicon, which is an important element for some types of solar panels favoured by Chinese producers, and wine. The Chinese justified the restrictions on exportation of EU wine because they claimed that they were investigating whether wine from the region was being sold at a low cost in the People’s Republic and whether they were also subject to unfair subsidies.

The international wine market breathed a collective sigh of relief this week as officials on both sides of the fence announced that the dispute was officially over. Although the issue of flooding the European market with Chinese solar panels hasn’t yet been resolved, the wine issue has.

The agreement the two powers came to should prove one to watch over the coming decade. Europe has agreed to aid China’s domestic production of wine and in turn, China has agreed to organise wine tastings for European products within its borders.

It’s clear that the agreement is being hailed on both sides of the continent. The EU Commissioner for Trade reportedly said of the deal that it is: “yet another positive development which will further strengthen the EU-China bilateral relationship”.

At the Ideal Wine Company, we see this as a chance to diversify Chinese wine. With European knowledge and production methods, it could become a real contender on the world stage in the next decade or two.  It certainly is one to watch.

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