China has declared that EU brandy makers have been dumping their spirits into its market but that it is not imposing anti-dumping measures for now.
The Chinese government launched an investigation in January over complaints of dumping. The probe examined imports of brandy in containers of less than 200 litres.
“The investigating authority preliminarily determined that there was dumping of imported relevant brandy originating from the European Union,” the Chinese Commerce Ministry announced in an official statement today (29 August).
The preliminary report from the probe found that China’s domestic distilled wine industry was “threatened with substantial damage” and that there was a “causal relationship between” the dumping and the threat of damage.
It said that no temporary anti-dumping measures would be taken in regard to this alleged case of distilled wine dumping by EU importers.
However, it determined in its preliminary ruling that the dumping margin ranged from 30.6% to 39%, indicating what future tariffs, if imposed, could be at the conclusion of the investigation.
The trade association spiritsEurope said it was “stunned” by what it saw as “unjustified Chinese provisional tariffs” on imported EU brandy.
“We are very disappointed by this announcement,” spiritsEurope director general Ulrich Adam said. “The tariffs, if applied, would constitute an unjustified market access barrier and have a detrimental impact on EU exports of wine-based and marc-based spirits to China, which represent the lion’s share (around 90%) of direct EU spirits exports to China in value.”
“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,” the trade association’s director hit back.
“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.”
The investigation, announced by China’s ministry of commerce, was launched in response to complaints by the China Liquor Industry Association.
The distilled wine probe followed Brussels launching an anti-subsidy investigation into Chinese electric vehicles last year.
Early morning trade of shares in Pernod Ricard and Remy Cointreau were up following the announcement of no action on brandy imports to China. Pernod Ricard shares were up 8% at 09:55 BST, while Remy Cointreau’s rallied 10%.
