Cognac war reaches final chapter, spirits titles in the spotlight

(Il Sole 24 Ore Radiocor) - The spirits sector is in focus following news of what appears to be the final chapter in China's battle against European brandy imports. Beijing has in fact announced that, starting tomorrow, it will impose a tax on imports of European brandy as the final response to an EU anti-dumping procedure against Chinese electric vehicles. The tariffs will range from 27.3% to 34.9% for a period of five years, but will not be retroactive.

This is probably the last act in a dispute that began in 2024, when the European Union accused Beijing of providing unfair subsidies to its automobile industry and, as a result, imposed tariffs on imports of Chinese electric vehicles. In response, China has launched an investigation into European brandy, in particular cognac from France. There have been many meetings between the Paris and Beijing summits to find an agreement. As a result of this trade dispute that has been going on for months, according to data from the Bureau National Interprofessionnel du Cognac, monthly exports of cognac to China, the world's most important market for this product, have plummeted by 70%.

Bruxxeles' reaction was not long in coming. "The EU regrets China's decision to impose definitive anti-dumping measures on EU brandy imports into China. The decision was notified to us today. The Commission has followed this investigation very closely from the beginning. Our view has always been unchanged and very firm. We consider China's measures to be unfair, unjustified, inconsistent with applicable international treaties and therefore unfounded,' a European Commission spokesperson attacked during the daily press briefing.

"Since the beginning of this matter, the Commission has intervened on several occasions to defend and support the EU industry, expressing our growing concerns and raising objections to the obvious shortcomings in the conduct of this investigation," the spokesperson explained. "Unfortunately," he added, "these measures are also part of a worrying trend of China abusing trade defence instruments, initiating and conducting investigations on the basis of questionable allegations and insufficient evidence. All this in a short space of time'. "Therefore," he concluded, "we will carefully analyse these measures and consider the next steps to best protect EU industry and economic interests.

Beijing's decision, contrary to what it may seem,is good news for the French cognac industry because there will be no anti-dumping tariffs for all those companies that stick to minimum import price undertakings. In fact, the Chinese Ministry of Commerce stated in a statement that some companies that had previously accepted minimum price undertakings, such as Remy Martin by Remy Cointreau and Martell & Co backed by Pernod Ricard, will not be subject to the higher tariff rate unless those undertakings are violated. Thus, in Paris Remy Cointreau rises, Pernod Ricard, after falling more than one percentage point, limits its declines. In London Diageo moved just above parity, more solid rises in Milan by Campari.