China Thirsts for More European Wine

(WSJ) - Chinese wine distributors are scrambling to secure bottles from Europe, fearing that a trade spat between the European Union and China—the world's fifth-largest wine market—might lead to significantly higher tariffs on imported European wine.

"Every import company is trying to finish the duty clearance as soon as possible to avoid paying more taxes," said Jared Liu, chief executive of the online wine retailer Yes My Wine, which sold more than 400 million yuan ($65 million) in wine last year. Mr. Liu said that his company, based in Shanghai, is spending an extra 10 million yuan in the coming weeks to make sure all its wines in bonded warehouses—a secured area for storing dutiable goods—are released.

"We don't have details on how much [the tax] will be raised, but the rumor we hear is that the policy will be deployed within 60 days and [the increase] could be very high."

China earlier this month launched an antidumping probe of European wine in response to the EU's move to increase tariffs on Chinese-made solar panels.

The investigation, wine distributors say, could lead to a substantial increase in duties.

Wine merchants are taking a wait-and-see approach. But Mr. Liu said people in the government are telling him that taxes are in the pipeline, hence his moves.

But extra tariffs on European wine could be a boon for producers from other regions who are ready to fill China's empty glasses if the trade spat drags on.