Pernod Ricard facing wine delays in China

Pernod Ricard, the owner of Australia’s popular Jacob’s Creek brand, is reporting that the company’s wines are being held up at Chinese ports, making it the sixth company to report customs delays as relations between the two countries continue to sour over Australian allegations of Chinese interference in domestic politics.

The news comes after companies including Australian wine giant Treasury Wine Estates and McWilliams Wines have reported that they were experiencing problems at Chinese customs after Australian prime minister Malcolm Turnbull complained of Chinese political interference, leading the country to introduce anti-foreign interference laws.

Pernod Ricard’s head office in France acknowledged that there had been an impact but played down the impact.

“We experienced some delays in China and we are actively working to resolve the issue,” a spokesman told Reuters. “Our business performance in the country is not impacted by this minor incident.”

But the report said the six companies affected by the two countries’ frictions held an emergency meeting last week to urge the Australian government to solve the delays, one government source told news agencies.

China, however, denied the delays and insisted they are routine customs clearance. But winemakers complained the clearance time has been prolonged from weeks to months, The Times reported, as relations deteriorate.

The two countries’ worsening relationship has cast a dark shadow on the wine trade just as growth of Australian wine in China is at all time high. Australian wine exports to China for the first time surpassed AU$1 billion in the past 12 months ending in April this year and, starting from next January, Australian wine exports will be exempt from the 14% import tariff based on the two countries’ Free Trade Agreement.

Domestically, nationalist sentiment seems to be causing the Chinese government to take a tougher stance with Australia. Global Times, among a few Chinese newspapers, is calling for China to slash Australian imports to teach Australia a lesson.

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