94Ha Viewpoint
The Ministry of Commerce of China issued an announcement on Monday, November 11th, declaring the decision to impose temporary anti-dumping measures on brandy originating from the European Union in the form of deposits or guarantees. This marks the second time in a month that China has taken such measures against imported brandy from the EU.
According to the announcement from the Ministry of Commerce of China, starting from the 15th of this month, importers of the investigated products must provide corresponding deposits or guarantees to the customs based on the deposit rate determined in the announcement.
In the wake of the EU’s anti-subsidy investigation into Chinese electric vehicles, China initiated an anti-dumping probe on brandy imported from the EU in January of this year.
By the end of August, China ruled that imported brandy from the EU was indeed dumped, posing a substantial threat to the Chinese brandy industry, and there was a causal relationship between the dumping and the threat of substantial damage. However, the Ministry of Commerce of China stated at the time that no taxes would be imposed on brandy imported from Europe.
Following the EU’s vote on October 4th to significantly increase tariffs on Chinese electric vehicle exports to the EU to as high as 45%, the Ministry of Commerce of China announced on October 8th the temporary anti-dumping measures against brandy imported from the EU. France believed that these measures against brandy were politically motivated to exert pressure on the EU.
The Ministry of Commerce of China announced that starting from October 11th, importers would be required to provide corresponding deposits to the Chinese customs based on the deposit rate determined in the announcement when importing relevant brandy from the EU. Notably, Martell S.A. had a rate of 30.6%, Pernod Ricard had a rate of 39.0%, and Remy Cointreau had a rate of 38.1%.
This will significantly increase the upfront costs of importing brandy from the EU. Analysts at JFry estimated in a report that the tariffs could raise end-consumer prices by 20%, leading to a potential 20% decrease in sales volume.
France, which voted in favor during the EU’s October decision, is the country most affected by these temporary anti-dumping measures. China imported approximately $1.7 billion USD (2.3 billion SGD) worth of brandy from France last year, with French products accounting for 99% of the total annual brandy imports.
