CHINA – China’s Ministry of Commerce has initiated an anti-dumping investigation into brandy imported from the European Union (EU), citing a 15.9 percent dumping margin on EU brandy exports to China.
The investigation was spurred by an application from the China Alcoholic Drinks Association (CADA) on Nov. 30, specifically targeting brandy in containers of less than 200 litres, as revealed by the ministry on Jan. 5.
The application from CADA underscores concerns within the domestic brandy industry, citing robust demand for brandy in China from 2019 to 2022. During this period, annual demand reached 72,048 tons, 56,829 tons, 69,004 tons, and 57,166 tons, respectively. Notably, the share of EU brandy in the Chinese market surged from 43 percent in 2022 to 49 percent.
According to Chinese customs data, EU brandy imports recorded a remarkable 23 percent increase, reaching 22,768 tons in the nine months ending on September 30 compared to the previous year.
The surge was particularly pronounced, with a 30 percent jump in the third quarter of the preceding year from the second quarter and a substantial 70 percent increase in the second quarter from the first.
France’s cognac industry association, the Bureau National Interprofessionnel du Cognac, responded to the investigation, expressing confidence in the compliance of their products with both Chinese and international regulations.
Producers under scrutiny include renowned entities like Rémy Cointreau, Pernod Ricard, and luxury conglomerate Louis Vuitton Moet Hennessy, the producer of Hennessy cognac.
Ulrich Adam, director general of SpiritsEurope said: “We trust that the EU and China will find a constructive way to resolve any bilateral disputes, as has happened in the past over other matters.
Technical cooperation between the EU and China in the spirit sector is both long-standing and excellent. This cooperation will be further strengthened in 2024, not least through the revived wine and spirits working group, and contribute to the good level of dialogue between the EU and China.”
Pernod Ricard, a major player in the spirits industry, expressed confidence in their products’ compliance with regulations and expressed optimism for a positive resolution.
Rémy Cointreau, witnessing significant success in Asia, particularly in Taiwan, reported a 16.6% rise in overall organic sales year on year in H1, led by robust growth in China.
The investigation into EU brandy comes months after China imposed temporary tariffs of between 107% and 212% on Australian wine in November 2020, accusing it of dumping cheap barley and wine into its market in 2020. Exports to mainland China dropped to almost zero in December.
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