Trade Minister Dan Tehan on Saturday announced that Australia was taking China to the World Trade Organization over wine tariffs which had "caused serious harm" to the industry.
Australian winemakers have welcomed the federal government's decision to refer China to the international trade umpire over tariffs that have crippled Australian wine exports.
Trade Minister Dan Tehan on Saturday announced that Australia was taking China to the World Trade Organization (WTO) over the tariffs, which are currently expected to remain for five years.
"We believe that actions taken by the Chinese government have caused serious harm to the Australian wine industry," Mr Tehan told reporters.
The wine tariffs of up to 220 per cent, announced last November, have seen exports to China tumble by 98 per cent.
"The Chinese market is closed to us, so the tariffs have made it uneconomic to export products there," Australian Grape & Wine chief executive Tony Battaglene told SBS News on Saturday.
He said it had been "a tricky few months" and "you can't recover overnight from a market the size of China".
"It will take some years, and there will be some pain," Mr Battaglene said.
He welcomed the trade minister's WTO announcement on Saturday, describing the action as "the logical next step".
"It's certainly not a short-term solution to any of the issues that we're facing," he said.
"What it does is create a situation where we can actually get dialogue with [China]. We don't believe that we have a case to answer, and this is the way to sort that out."
Chester Osborn from South Australian winery d'Arenberg said the industry believed going to the WTO was the only option they have left.
"We're not getting anywhere with conversation with China so what else can you do really," he told SBS News.
"I'd like to think though that Australia could converse with China and resolve this without having to go through the WTO, but we'll just have to use whatever we can, I suppose."
'We're not discounting'
China has said it's trying to stop cheap wine from hurting its domestic market, accusing Australia of dumping its bottles at low prices.
But this claim has been rejected by winemakers.
"It's the most expensive wine over there per litre, by country, and also the most expensive market by litre for export for Australian wine anywhere in the world," Mr Osborn said.
"So obviously, we're not discounting."
Mr Battaglene said the WTO decision would allow an independent arbitrator to assess the dispute on its merits, "and for us that's a really important step".
"We want our reputation to be unsullied, it's important to us, as well as we'd love to get back in to the Chinese market again."
It will be the ninth dispute that Australia has taken to the WTO, having also recently referred Beijing over crippling tariffs imposed on the country's barley.
But Australian cotton, coal and seafood have also been affected, amid worsening relations between the two countries.
Labor's Kristina Keneally supported Australia taking China to the WTO, but said the prime minister should have been helping farmers diversify their markets instead of Australia becoming "more and more reliant on China".
"The fact that we are now the most dependent country on China anywhere in the world, just shows a failure when it comes to trade and a failure when it comes to diplomacy," she told reporters on Saturday.