Australian Customs Notice - 2000/10 -
Friday, 25th February 2000

CUSTOMS ACT 1901 - PART XVB CONTINUATION INQUIRY BULK BRANDY EXPORTED FROM FRANCE

The
Australian Customs Service has completed its inquiry into whether countervailing measures
currently applying to imports of bulk brandy (of alcoholic strength by volume exceeding
57%) from France should be continued for a further five years. The findings of Customs are
detailed in Trade Measures Report no. 14.


Customs is
satisfied that subsidies are still payable by the European Commission on bulk brandy
produced in France and that the subsidies are likely to continue for the foreseeable
future.


Customs is
also satisfied that the expiration of the countervailing duty would be likely to lead to a
continuation of the subsidisation and the material injury that the duty was intended to
prevent.


In the light
of the above, Customs has recommended that the Minister take action to continue the
countervailing duty for a further five years.


The Minister
for Justice and Customs has accepted Customs recommendation and, as a consequence, the
countervailing measures will continue until 27 February 2005.


A printed
version of Trade Measures Report No. 14 is expected to be available shortly. A copy of the
summary page from the Report is attached.


A copy of
Report No. 14 will be sent to each of those parties who made submissions to the inquiry.
Copies will also be available on request from Phil Hilyard, Trade Measures Branch, at
Customs by telephoning (02) 6275-6057 or by e-mail at href="mailto:phil.hilyard@customs.gov.au">phil.hilyard@customs.gov.au


Trade
Measures Report No. 14 will also be available on the Internet at:


Report 14


Any questions
about this notice may be directed to Petri Povel, Assistant Director, Dumping Review by
telephone (02) 6275-6055 or email petri.povel@customs.gov.au






NAME="_Toc472219384">SUMMARY



This report presents Customs
conclusions and recommendations to the Minister as a result of its inquiry into whether
the countervailing duty currently applying to bulk brandy exported to Australia from
France should be continued.


Under the Australian
legislation, countervailing duties automatically expire five years after their imposition.
The countervailing duty applying to bulk brandy from France is due to expire on
27 February 2000. However, interested parties are able to apply to Customs for
the continuation of the duty for a further five years beyond the expiry date.


Following an application from
the Winemakers' Federation of Australia for the continuation of the duty, Customs
initiated this inquiry on 9 August 1999.


The product under inquiry is
bulk brandy - distilled wholly from grape wine - with an alcoholic strength by volume
exceeding 57 per cent and imported in containers holding five litres or more. It is a
legislative requirement that distilled wine must be matured in wood for a minimum of two
years before it can be considered brandy and cleared for consumption. Bulk brandy is
diluted prior to bottling. The annual retail value of the Australian bottled brandy market
is estimated to be about $80 million.


From its inquiries, Customs
has established that the Australian market for bulk brandy is supplied by Australian
production and by imports, predominantly from France. While the overall bulk brandy market
declined by almost twenty per cent over the past five years, imports of bulk brandy from
France remained stable. In the same period, the market share held by the Australian
industry declined by one third to around thirty per cent.


Customs found that the
Australian industry has suffered reduced sales, price undercutting and loss of profits
that could be linked to the imported subsidised French brandy.


From information obtained
during its inquiries, Customs also established that the European Commission continues to
pay a subsidy to distillers of wine to partly compensate for the high price paid for wine.
As distillation is an integral process in the production of brandy, Customs considers that
the brandy produced in France continues to be subsidised. Customs also found that the
level of the subsidy has increased over the past five years.


On the basis of the available
evidence, Customs is satisfied that the expiration of the countervailing duty would be
likely to lead to a continuation of the subsidisation and the material injury that the
duty was intended to prevent.


Accordingly, Customs has
recommended to the Minister that the countervailing duty on exports of bulk brandy from
France should be continued for a further five-year period.






Paul O'Connor

National Manager

Trade Measures Branch

for Chief Executive Officer

CANBERRA ACT 2601


25 February 2000


http://customs.gov.au/site/content2245.asp modified: 5:12 PM 16 Aug 2004