China is investigating whether Australian winemakers were exporting reduced-price wines to China, undercutting local producers.

Bruce Tyrrell of Tyrrell's Wines said the accusation was "completely wrong".

"The average price of wine exported to China has gone up by 30 per cent over the past four years," he said.

Chinese authorities are also exploring whether Australian exporters were being propped up by government subsidies, another allegation Mr Tyrrell said was not true.

Prime Minister Scott Morrison also shot down the accusations.

"We totally don't accept any suggestion that there has been any dumping of Australian wine in China whatsoever," Mr Morrison said.

"There is no basis against the claims made against the Australian wine industry or subsidies or things of that nature."

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However, Mr Tyrrell said the investigation was not a total surprise, the issue having hung around for a few months.

China slapped tariffs on Australian barley and beef following Australia leading calls for an investigation into the origins of coronavirus. China currently makes up about a third of Australia's wine export market.

Mr Tyrrell said domestic sales in China were going down, so believed pressure could have been coming from local producers to put a tax on Australia, which is one of China's biggest international sources of wine.

"The Australian wine industry now has an amount of Chinese ownership, so it will be interesting to see if they put tariffs on their own people," Mr Tyrrell said.

Mr Tyrrell said about half of his business's exports were to China, but that he was starting to look into other Asian markets, such as Korea and Japan.

However, the vigneron said he wasn't overly worried about the recent announcement and would just wait to see what came out of the investigation, which he said would have no immediate impact on business in China.

"It's no good worrying about it," he said. "We'll just have to wait and see and give all the assistance we can."

Australian Grape & Wine, the national association of grape and wine producers, said in a statement that its exporting companies would cooperate fully with the inquiry.

"We believe that the Australian grape and wine sector is well placed to respond to this investigation," the statement said.

"China is an important market for Australian wine and our wine is in demand from Chinese consumers. Australia has a large number of exporters with close cultural ties to China.

"The Australian industry welcomes the opportunity to build on these ties and work with the Chinese industry and government to further technical cooperation and develop lasting relationships."