China’s Ministry of Commerce (MOFCOM) has confirmed anti-dumping duties will be imposed on EU brandy imports but some companies will be exempt after agreeing a deal on prices.
In a statement today (4 July) marking the conclusion of its anti-dumping investigation into EU brandy, MOFCOM said it would apply duties ranging from 27.7%-34.9% on EU brandy products from tomorrow (5 July).
Go deeper with GlobalData
According to the Bureau National Interprofessionnel du Cognac (BNIC), three companies will benefit from a deal struck on minimum import prices. Pernod Ricard, Rémy Cointreau, and Hennessy are those to be exempted, Just Drinks understands.
MOFCOM said “there is dumping of imported brandy originating from the EU”.
Consequently, “the domestic related brandy industry is threatened with substantial damage, and there is a causal relationship between dumping and the threat of substantial damage”, the ministry said.
Beijing launched an investigation last year into complaints from the China Liquor Industry Association about the alleged dumping of brandy into the market.
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 GlobalDataResponding to the news, France’s national trade body the BNIC confirmed the tax would affects eau-de-vis de vin, like Armagnac, eau-de-vis de marc, like pomace brandy as well as other EU brandy, such as Cognac.
The BNIC noted the final duty was “slightly” less than the provisional average duty imposed in October last year.
It stressed “our sectors have demonstrated a complete absence of dumping on the Chinese market for 18 months”.
The BNIC added “some” of its members had managed to secure “minimum price commitments” with MOFCOM, which leaves them exempt from the anti-dumping duty. These minimum import prices will also apply from tomorrow.
In a stock-exchange filing today, Rémy Cointreau said it was “still awaiting further details regarding the practical arrangements for implementing this agreement”.
“While the commercial terms of this agreement are less favorable than those that were in effect prior to the initiation of the investigation, they nonetheless represent a significantly more favorable outcome, or at the very least, a substantially less punitive alternative, compared to the imposition of definitive anti-dumping duties,” it said.
Pernod Ricard said it “welcomes the conclusion of China’s MOFCOM Cognac anti-dumping investigation and agrees to a minimum price undertaking”. It added: “This agreement does not constitute an acknowledgment of dumping practices.”
The Martell owner said it “regrets the increase in the cost of operating in China but notes that the additional costs arising from the agreed minimum price undertaking are significantly less than would be the case if the provisional anti-dumping tariffs had been made permanent”.
The BNIC said the list of companies which have been approved to use a minimum import price should “be extended to all those that responded to the investigation and that all companies that signed the minimum price agreement be eligible to benefit from it”.
Florent Morillon, president of the BNIC, said: “This decision marks the end of the anti-dumping investigation, but not the end of our efforts to ensure that all our exporters regain unhindered access to the Chinese market as quickly as possible.
“In the meantime, the minimum price commitment regime offers more tolerable conditions for our companies than the announced definitive anti-dumping duties, even if the market access they provide remains impaired.”
According to the BNIC and EU spirits trade association SpiritsEurope, MOFCOM also to reimburse guarantees and release securities paid since October 2024.
Cognac has faced tariffs on exports to China since last October when Beijing imposed “provisional dumping measures” on imports of EU-origin brandy. Companies importing products have had to pay a security deposit to Chinese authorities upon arrival.
The situation around duty-free is more hazy. The BNIC said: “No information has been provided on the reopening of the duty-free market, from which Cognac has been excluded since December 2024 and which traditionally represents nearly 20% of its sales in China.”
Commenting on Beijing’s decision, SpiritsEurope director general Hervé Dumesny said: “We regret the decision to impose definitive anti-dumping duties on EU wine-based and marc-based spirits producers, despite the clear evidence presented to the contrary.
“Beyond its direct impact on our sector, this decision risks fuelling trade tensions at a time when mutual cooperation is more important than ever. We nonetheless welcome the conclusion of price undertakings with certain companies, as they offer partial relief, and we urge that this option be extended to all companies that have signed up.”
