France and China could be close to a deal to resolve the ongoing trade dispute over Cognac exports.
Yesterday (12 June), the Cognac trade body Bureau National Interprofessionnel du Cognac (BNIC) said that it was hoping for “a positive outcome” from talks which had taken place around China’s ongoing anti-dumping investigation.
“Agreements could be signed in the coming hours, and we will be able to communicate once the agreement is finalised,” the industry group said.
Go deeper with GlobalData
Diplomatic sources told Just Drinks yesterday that talks around the Cognac dispute were ongoing.
A statement from the BNIC today (13 June) confirmed “the industry has collectively decided to enter into negotiations with the Chinese authorities regarding minimum price commitment proposals”.
This would allow producers to apply “a minimum import price” for the Chinese market, in exchange for the removal of anti-dumping duties.
Reports from Reuters indicate that negotiators have proposed implementing minimum prices for exports to China between $20 and roughly $300 per litre.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe proposal is allegedly an opening bid which looks to bring the ongoing trade deadlock between the two countries to a close.
The Cognac industry has been facing tariffs on exports to China since October, when the Asian country’s commerce ministry imposed “provisional dumping measures” on imports of EU-origin brandy.
Since October, companies importing products including brandy have had to pay a security deposit to Chinese authorities upon arrival.
China launched its investigation last year after receiving complaints of brandy dumping from the China Liquor Industry Association. The move followed the EU’s launch of an anti-subsidy investigation into Chinese electric vehicles in September 2023.
The probe has been assessing dumping allegations made between 1 October 2022 and 30 September 2023 for EU brandy imported in containers of under 200 litres.
Florent Morillon, President of the BNIC said today: “The ongoing negotiations are progressing positively, and we hope they will soon be concluded.”
He added: “Beyond these possible commitments, we reiterate our urgent call for the immediate lifting of the unjustified blockage of the duty-free market, which until recently accounted for 20% of our sales in China and has remained closed since December 1, 2024.”
Gabriel Picard, chairman of the Fédération des Exportateurs de Vins & Spiritueux de France (FEVS) was quoted by French daily Sud Ouest as having confirmed that a “minimum price commitment” was “being discussed between France and China”
“So, technically, we’re in agreement,” he reportedly said during a presentation of a report on France’s spirits industry. “This minimum price commitment would represent an additional cost of around 12% to 16% for the arrival of our products on the Chinese market.”
FEVS did not respond to Just Drinks‘ requests for comment at the time of writing.
At the end of March, reports emerged suggesting China had postponed concluding its anti-dumping investigation into EU brandy products.
According to news outlets Bloomberg and Reuters at the time, France’s Foreign Minister Jean-Noël Barrot told journalists during a trip to China in March that the completion of the probe had been delayed by three months.
“This measure should give us a few months’ breathing space with the reopening of duty-free sales of Cognac and Armagnac, which represent a significant volume of sales for some brands,” he said in emailed comments to Bloomberg at the time.
China’s Ministry of Commerce announced in January that it had extended its anti-dumping probe of brandy originating from the EU by three months.
The investigation, launched on 5 January 2024 and initially due to last one year, was expected to be completed by 5 April.
