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EU producers guilty of dumping brandy, China says
The brandy industry has been branded a “collateral victim” of political tensions between China and the EU following the conclusion of a dumping probe by the Chinese Ministry of Commerce (MOFCOM) announced today.
MOFCOM released a statement today (29 August) declaring that its investigation confirmed suspicions of EU brandy producers dumping their products in the country.
It announced that its nine-month investigation has revealed dumping of EU brandy in levels which “threatened” the domestic distilled wine industry “with substantial damage”.
However, it said that duties will not be applied for now. The decision has been described as preliminary and is not accompanied by any provisional measures. Final tariffs, announced at the end of the investigation, could differ from those announced today, or may not be applied.
If applied, the duties on EU wine-based and marc-based spirits at the end of the procedure would average 34.8%.
In a statement shared with the drinks business, Florent Morillon, President of the Bureau National Interprofessionnel du Cognac (BNIC), said the proposed duties would “severely affect Cognac’s exports to China, a market which alone accounts for 25% of our exports”.
China’s Commerce Ministry launched the probe in January. EU officials have accused the People’s Republic of introducing the probe following an EU investigation into Chinese electric vehicles.
Morillon blamed political tensions for the potential punitive tariffs. He said: “The entire industry would now be the collateral victim of a conflict that goes beyond it, and which would deprive Chinese consumers of a product they particularly appreciate.”
EU producers provided evidence to MOFCOM in the hopes of proving that no dumping occurred. Morillon called the announcement “all the more incomprehensible given that we had cooperated fully with the Chinese authorities throughout the investigation initiated in early 2024, and demonstrated the complete transparency of our practices”.
He concluded: “We expect France and the European Union to negotiate immediately for the non-application and abandonment of these rights.”
The investigation concerns only wine spirits, marc and brandies imported by China from the EU in containers of less than 200 litres. Wine spirits, marc and brandies imported by China from the EU in containers over 200l (i.e. in bulk) would therefore not be affected by the additional taxes.
Wine-based and marc-based spirits imports to China represent around 90% of direct EU spirits exports to the country in value terms.
Ulrich Adam, director general for trade association spiritsEurope, said the “only silver lining at this stage is that the provisional duties will not apply for now.”
He added: “The evidence the brandy sector provided throughout the investigation demonstrated that the conditions for initiating an investigation were not met. In contrast, the evidence of dumping, injury, and causal link provided in the application was insufficient to justify the initiation of an investigation. Our sector seems to be a collateral victim of a broader trade conflict, which will limit the access of Chinese consumers to products they greatly value and appreciate, if not resolved as a matter of priority.”
Spirits giant Rémy Cointreau, which produces Cognac brands Louis XIII and Rémy Martin, has said it intends to continue cooperating fully with the Chinese authorities until the investigation is complete. “At the same time, the group is continuing to assess all options and growth opportunities that will enable it to mitigate any negative fallout from MOFCOM’s final decision,” the company said in a statement.
It continued: “China is a long-standing trading partner for the Louis XIII and Rémy Martin brands, which have enjoyed a strong presence and strong desirability in the country for many decades. The group will thus continue to invest there to prepare for tomorrow’s growth.”
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