China Delays Tariffs On European Brandy Imports Amid Anti-Dumping Probe

China announced that it will not impose provisional tariffs on brandy imported from the European Union at this time, after launching an anti-dumping investigation aimed primarily at France. The move affects major European spirits companies, which derive significant revenue from the Chinese market.

China announced on Thursday that it will not impose provisional tariffs on European Union brandy for now, leaving the door open for future actions. This decision comes after an anti-dumping investigation was launched in January, targeting primarily France.

China imported $1.57 billion worth of spirits from distilled grape wine in 2023 up until November, with France contributing to 99% of the brandy imports. In 2022, brandy constituted the largest portion of imported spirits in China, totaling 37.5 million liters, as per a Daxue Consulting report. The country has a dozen local brandy producers, including the largest domestic player, Yantai Changyu Pioneer Wine Co Ltd, known for Koya brandy.

Several European companies are significantly exposed to the Chinese market. French spirits maker Remy Cointreau derived 30% of its group sales, or 464.6 million euros, from China in the fiscal year 2022/2023. Without tariffs, Remy Martin could otherwise face 38.1% import tariffs. Pernod Ricard, whose Martell brand dominates its Chinese operations, could face 30.6% tariffs. Diageo, despite less exposure, has an indirect risk of 2-3% through its joint venture with LVMH, which owns Hennessy potentially facing 39% tariffs. Lastly, Campari, which recently acquired Courvoisier aiming to expand in China, represents another key player affected by this decision.

($1 = 0.9162 euros) ($1 = 0.7889 pounds) (Reporting by Michal Aleksandrowicz, Dagmarah Mackos, and Anna Pruchnicka in Gdansk; Editing by Milla Nissi and Andrea Ricci.)

(With inputs from agencies.)