NEWS
CHINA MOVES TO IMPOSE ANTI-DUMPING MEASURES ON EU BRANDIES
By Tony Zhu
8-10-2024
Credit: Siulan Law Mathews
China announced today that it will impose temporary anti-dumping measures on brandies from European Union (EU) as a response to EU’s decision on last Friday to slap tariffs on China made electric vehicles (Evs).
As of 11 October, importers of brandies from EU will have to put down security deposits ranging from 30.6 to 39.0 percent of the import value, China’s ministry of commerce said.
Companies that had cooperated in China's investigation were hit with relatively lower security deposit rate of 34.8 percent, with the rate imposed on Martell the lowest at 30.6 percent.
LVMH owned Hennessy and Remy Martin were among the brands hardest hit by the measure, with importers having to pay security deposits of 39.0 and 38.1 percent respectively.
The deposits would make it more costly upfront to import brandies from the EU. However they could be returned if a deal is eventually reached before definitive tariffs are imposed.
Some industry analysts said the measures could mean a 20 percent rise in retail price in China and a 20 percent reduction in sales volume.
France was seen as the target of Beijing's brandy probe due to its support of tariffs on China made EVs. French brandy shipments to China reached USD1.7 billion last year and accounted for 99 percent of China's imports of the spirit.
France has already responded to say that it would work with the EU to take action at the World Trade Organisation (WTO).
Share price of Remy Cointreau was down 8.42 percent at midday trading today while both LVMH and Pernod Ricard saw share prices drop about 3.6 percent.
Despite strong objection from member states including Germany and Hungary, the EU voted to impose extra tariffs ranging from 7.8 percent for Tesla to 35.3 percent for SAIC and other Chinese EV producers last Friday.
These are on top of the existing 10 percent car import duty. The European Commission has said it is willing to continue negotiating with China even after tariffs are imposed.
China is also investigating on EU pork products and has also said that it is considering a hike in tariffs on imports of large-engine vehicles, which would hit German producers hardest.
(the writer can be contacted at: info@thewinechronicle.com)
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