China Imposes Anti-Dumping Measures on EU Brandy Imports

BEIJING/PARIS – China has enacted temporary anti-dumping measures on brandy imports from the European Union, affecting well-known brands like Hennessy and Remy Martin. This action follows the EU's decision to impose tariffs on Chinese electric vehicles (EVs).

The Chinese commerce ministry stated that a preliminary investigation found EU brandy dumping poses a serious threat to China’s local brandy industry, which could suffer "substantial damage."

The ministry hinted at further measures, announcing an ongoing investigation into EU pork and a potential increase in tariffs for large-engine vehicle imports, significantly impacting German manufacturers.

Starting October 11, importers of EU brandy must pay security deposits ranging from 34.8% to 39.0% of the import value. France is particularly targeted as it accounted for 99% of China’s brandy imports last year, valued at $1.7 billion.

Major brands like Hennessy and Remy Martin will face the highest deposit rates of 39.0% and 38.1%, making upfront costs significantly higher for importers. Details on reclaiming these deposits remain unclear.

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Stocks of Pernod Ricard fell by 2.9%, and Remy Cointreau dropped 5% following the announcement, with LVMH down by 4%.

Companies cooperating with the Chinese investigation are subject to lower security deposit rates, with Martell having the lowest at 30.6%.

This punitive action follows an EU vote to implement tariffs on China-made EVs, set to be in effect by the end of October. Before this vote, China had paused its planned anti-dumping measures on EU brandy, which it had been investigating for below-market pricing in its consumer market.

The EU's tariffs for Chinese EVs will range from 7.8% for Tesla to 35.3% for other non-cooperative producers, in addition to a standard 10% car import duty. The European Commission remains open to alternative negotiations despite the tariffs.