China’s online consumers have been warned of delays in accessing sought-after Australian dairy and vitamin products as confusion over Chinese tax rules on imported goods escalates.
Online shopping portal Tmall — a popular website for Australian-made dairy and vitamin products — warned online shoppers yesterday that changes in Chinese customs policies would cause a delay in delivery.
“Due to changes in import tariff policies, orders placed during the period of customs system upgrade may be delayed in delivery as it takes longer to do customs clearance,” the website said.
Australian brands Devondale, Bellamy’s, a2 and Blackmores were still available on the Tmall website yesterday, but sellers warned of delays of up to 14 days because of the tax changes.
China has effectively changed the tax groupings, under its postal tax regime, for products sold through the e-commerce platform and increased the tax rate of each group. It also produced a list, dubbed the “positive list” by the market, which clarified what category a product sat under and therefore the tax rate it fell under.
The heightened confusion over China’s rules on cross-border e-commerce, which covers products purchased directly from a product’s origin, sent Australian agribusiness stocks on a downward spiral. Blackmores, which clocked a record one-day fall on Monday, fell a further 6.7 per cent yesterday to $165. Murray Goulburn took an 8.2 per cent hit to $2, Bellamy’s plunged 10.7 per cent to $8.88, Freedom Foods was down 4.2 per cent at $3.44 and a2 fell 6.5 per cent to $1.59.
Murray Goulburn managing director Gary Helou said the cross-border e-commerce channel had been good for the free flow of goods, but it was always going to be a problem if it grew quickly, which he said it had.
“But there is a much bigger e-commerce business happening through general trade, where the product has been made with the full packaging requirements of the Chinese regulator,” he told The Australian from Shanghai.
“There is a lot of business through that route and that has not been impacted.”
Mr Helou said the Chinese tax changes were not a surprise and said the company was seeking further clarity of what was on the “positive list”.
“We understand from our own connections that there will be more detail over the days and weeks ahead and I’m comfortable and confident this will all be clarified,” he said.
Murray Gouldburn told investors that Devondale consumer milk powder and UHT had been temporarily removed from some Chinese sites for immediate sale.
“If you’re an online platform business and you’re confused about what the regulation says, some platforms decided to err on the conservative and drop some of those products and I can understand that,” Mr Helou said.
He added that China’s appetite for dairy would grow. “The opportunity for Australia is immense and the Australia-China relationship will make sure this will become a mutually beneficial economic relationship between the two countries.”
PwC’s Asia practice leader, Andrew Parker, said while some tax rates had changed, there had always been rules in China about how much you could import over e-commerce platforms.
“What’s happened is, the entrepreneurs in China figured out the authorities weren’t policing these rules, so they were bringing in containers of baby formula or vitamins and not complying with existing rules,” he said. “The world has been screaming at China to comply with a rules-based order and here they are now cracking down and applying a set of rules and we are all shouting at them again.”
Mr Parker said he would be surprised if the China crackdown had a material impact on any Australian-listed company.
He said the market would settle down and the Chinese consumer would still want Australian products.
Blackmores chairman Marcus Blackmore, who owns 24.5 per cent of Blackmores, said the company’s share price slump was more to do with profit taking by investors.
“Our share price at one stage got to $220,” Mr Blackmore told The Australianyesterday.
Mr Blackmore said he had sent an email to his chief executive Christine Holgate on Monday noting how Blackmores was being caught up in a “China-sensitive environment’’ and telling her “I’m not worried”.
“We think that a more regulated system in China will actually support us ... my understanding is that plenty of our products are approved. Not all are but most are.’’
A spokesman for Trade Minister Steven Ciobo said the government was aware of changes to China’s cross-border e-commerce and would seek clarification from officials on the full nature of the changes.
“Much of the detail on how this will affect sales of popular products like vitamin supplements and milk powders will become clearer as the implementation rolls out,” he said.