The Chinese government has announced it will place tariffs on all Australian wine imports from Saturday, striking a blow to the $1.2 billion-a-year industry.

It follows the preliminary findings of a Chinese anti-dumping investigation into Australia’s wine exports that found that dumping exists and caused Chinese winemakers “substantial harm”.

China has accused Australian producers of selling wine for below the cost of production.

The investigation is not due to finish until 2021, but China’s Commerce Ministry announced that from November 28, importers of Australian wine entering China will need to pay temporary “anti-dumping security deposits”.

“There is dumping of imported wines originating in Australia … [and] it has been substantive,” the ministry said in a statement on its website.

“There is a causal relationship between dumping and material damage and it has been decided to implement temporary anti-dumping measures … in the form of a deposit from November 28.”

It said the investigation had been conducted in “strict accordance with relevant Chinese laws and regulations and WTO (World Trade Organisation) rules”.

The deposits, which effectively work like tariffs, will range from between 107 per cent to more than 200 per cent.

Agriculture Minister David Littleproud said the government was extremely disappointed in the move by Australia’s top wine market.

“The fact is Australia produces amongst the least subsidised product in the world and provides the second-lowest level of farm subsidies in the OECD,” he said in a statement on Friday.

“Today’s decision is a seriously concerning development and one which Australia will be vigorously fighting against.

“The Australian government categorically rejects any allegation that our wine producers are dumping product into China, and we continue to believe there is no basis or any evidence for these claims.”

He said the government was considering all its options, but would work with Chinese authorities as the dumping investigation continued.

The tariff announcement comes amid souring trading relations that have seen China impose import tariffs on Australian barley.

Treasury Wine Estates announced it has gone into a trading halt following the announcement.

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Tony Battaglene from Wine and Grape Australia said the tariffs would make it incredibly difficult for Australian wine exporters.

“The China market is a big market for us, but also some of our major competitors, particularly from Europe, are [now] given a tariff advantage of 100-200 per cent [which] is going to make it very difficult to compete … it won’t be good,” he said.

Mr Battaglene said there were hundreds of shipping containers of Australian wine building up at ports across China since an unofficial ban on imports came into effect earlier this month.

He said the industry was unaware of any wine that had cleared China’s customs since the ban, and subsequently large numbers of wine exporters had withheld from shipping wine from Australia.

“I can’t remember a year like this. This is the biggest single challenge we have ever faced in such an important market for us,” Mr Battaglene said.

“We need to be able get through this and work with both the Australian and Chinese government to resolve this.”

-with agencies