Beijing imposes penalties on designated European brandy producers.
In a move that could significantly impact the global spirits market, China's Customs Tariff Commission has imposed anti-dumping taxes on several major French brandy brands, including Hennessy, Remy Martin, and Martell. The decision, announced recently, follows an investigation launched last year that found these brandies were being sold at dumped prices in the Chinese market.
The investigation determined that the dumping of European brandy posed a significant threat of substantial damage to China's domestic brandy industry. The Commission found a clear causal relationship between the dumping and the threat it posed to the domestic industry.
This action comes amidst growing trade tensions between China and the European Union. Months earlier, the European Union started its own probe into Chinese subsidies for electric vehicle manufacturers. China's imposition of anti-dumping taxes on European brandy is seen as a retaliatory trade measure in this ongoing dispute between the two economic powers.
The duties apply to brandy imported in containers of less than 200 liters. The tax rates differ by brand, with Hennessy facing the highest levy at 34.9%, Remy Martin 34.3%, and Martell 27.7%.
The financial impact of these measures on the French cognac industry has been substantial. China is a major market for French cognac, absorbing about a quarter of French exports. The sanctions have resulted in significant financial losses for the sector, estimated at around 50 million euros per month.
Negotiations between the French Federation of Wine and Spirits Exporters and Chinese authorities have involved a proposed price increase of between 12% and 16%. However, the Chinese Customs Tariff Commission has not yet made a decision on whether to increase the tariffs on European brandy beyond the provisional measures.
The French National Assembly President, Yaël Braun-Pivet, expressed hope that the sanctions on European brandy would be lifted "in the next few days" during a visit to China. The future of these iconic French brands in the Chinese market remains uncertain, as both parties continue to negotiate a resolution to this trade dispute.
Portugal's news outlets have reported on the ongoing trade tensions between China and the European Union, highlighting the impact on the global spirits market, particularly the Portuguese finance and politics sectors. As the world's sixth-largest exporter of wine and spirits, Portugal may face potential repercussions from China's recent imposition of anti-dumping taxes on European brandy, including French cognac brands like Hennessy, Remy Martin, and Martell. The General News section in Portuguese newspapers has been monitoring the potential threats to Portugal's wine and spirits industry due to this retaliatory trade measure.
