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Category: Business, Economics and Finance / Food Processing

Bellamy's stock price falls after reports China will impose new online tax

Wednesday, 30 Mar 2016 03:44:05 | Richard Baines

Bellamy's Laura McBain does not believe the reported tax will impact sales in China. (Supplied: Bellamy's)

A new tax on goods purchased through overseas websites imposed by China will not lessen the country's demand for Australian products, Tasmanian Senator Richard Colbeck has said.

Key points:

  • China to reportedly introduce new tax on overseas online purchases
  • Baby food maker Bellamy's stocks fall almost six per cent
  • Senator Colbeck says demand will continue

Shares in some Australian companies tumbled after reports China would introduce the new 11.9 per cent tax next month.

Senator Colbeck, Australia's Assistant Trade Minister, stressed that the details of the tax were still unclear.

He said the move appeared to be an attempt to restore purchasing parity between Chinese goods and international goods.

"If someone was purchasing a product on a Chinese-based website it would attract tax, whereas if it was being purchased off a website based outside China it wouldn't," he said.

"If what they are looking to do is to balance the taxation treatment on various online supply chains then it makes it a bit hard to argue about."

One Australian company hit by the news was Tasmanian-based organic baby food maker Bellamy's.

Senator expects demand for products will continue

Bellamy's has been making the most of China's growing demand for Australian-made baby formula but on Tuesday, shares were posting the second biggest losses on the ASX 200 index - down by around 6 per cent.

The company's CEO and managing director, Laura McBain, was unavailable for an interview but in a statement cited a loyal customer base.

"Bellamy's products continue to be in high demand in China, and we do not anticipate the tax will have a negative impact on sales," she said.

"Our focus continues to be on meeting demand and producing the highest quality organic products; giving mothers piece of mind that they are providing their babies a pure start to life."

Mr Colbeck said it was hard to know whether Australian products and companies like Bellamy's would be hurt by the tax.

"Talking at an Australian-Chinese business dialogue at a pretty high level I didn't see any indication of a lessening of demand for Australia's high-quality safe food products, I only saw indications that demand for those is going to continue," he said.

The Federal Government is seeking clarity about the tax from its Beijing embassy.

AustraliaPlus


 

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