China quar­rel hits wines

Jacob’s Creek cus­toms de­lays fol­low po­lit­i­cal row

The Gold Coast Bulletin - - BUSINESS - COLIN PACK­HAM

WINE ship­ments from Pernod Ri­card’s Australian busi­ness have been held up at Chi­nese ports, two sources have told Reuters, the first for­eign com­pany to be harmed by a de­te­ri­o­ra­tion in re­la­tions be­tween Aus­tralia and China.

Six Australian wine com­pa­nies have faced de­lays at Chi­nese cus­toms since Prime Min­is­ter Mal­colm Turnbull com­plained of Chi­nese po­lit­i­cal in­ter­fer­ence in late 2017, strain­ing ties be­tween the two trad­ing part­ners, a se­nior gov­ern­ment of­fi­cial says.

The listed French com­pany Pernod Ri­card owns the bigselling Australian wine brand Jacob’s Creek.

Aus­tralia has ac­cused China of med­dling in its do­mes­tic af­fairs and is in­tro­duc­ing for­eign in­ter­fer­ence laws.

China has de­nied any such ac­tiv­ity.

“Pernod Ri­card through its own­er­ship of Jacob’s Creek has been im­pacted by China’s re­stric­tions,” said a gov­ern­ment source briefed on the is­sue, who de­clined to be iden­ti­fied.

Pernod Ri­card’s head of­fice in France ac­knowl­edged that there had been an im­pact but de­clined to go into de­tails.

“We ex­pe­ri­enced some de­lays in China and we are ac­tively work­ing to re­solve the is­sue,” a spokesman said.

“Our busi­ness per­for­mance in the coun­try is not im­pacted by this mi­nor in­ci­dent.”

In re­cent months, Trea­sury Wine Es­tates Ltd and McWil­liams Wines have dis­closed that they are ex­pe­ri­enc­ing prob­lems at Chi­nese cus­toms.

They and Pernod Ri­card joined sev­eral other com­pa­nies for an emer­gency meet­ing with gov­ern­ment of­fi­cials last week, a gov­ern­ment source said, to urge the gov­ern­ment to break the im­passe with China over trade re­stric­tions.

China’s cus­toms have not re­sponded to faxes re­quest­ing com­ment on the de­lays. Pernod Ri­card, which man­u­fac­tures and sells var­i­ous al­co­holic drinks in­clud­ing Ab­so­lut Vodka and Martell cognac, does not pub­lish sales records of its wines to China.

But in June, it said China ac­counted for about 9 per cent of its global sales of 9 bil­lion eu­ros ($A14 bil­lion).

The Chi­nese de­lays have cast a shadow over an other­wise golden pe­riod for Australian wine ex­ports, which are fore­cast to be worth more than $A1 bil­lion in 2018.

DroneShield has landed a ma­jor con­tract with a Mid­dle Eastern coun­try for its DroneGun de­vice, which dis­ables drones elec­tron­i­cally.

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