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China confirms duties on EU brandy, some companies exempt

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).

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.

Responding 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".

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