Cognac, Armagnac's caution after French government China talks
Three French spirits trade bodies have warned the potential delay to China's anti-dumping probe of brandy does not change the ongoing negative impact of provisional taxes on Cognac and Armagnac producers.
According to reports from Bloomberg and Reuters on Friday (28 March), during his trip, France's Foreign Minister Jean-Noël Barrot told journalists the completion of China's investigation into EU brandy products had been delayed three months.
'This measure should give us a few months' breathing space with the reopening of duty-free sales of Cognac and Armagnac, which represent a significant volume of sales for some brands,' he said in emailed comments to Bloomberg.
In a joint statement yesterday (31 March), the Bureau National Interprofessionnel du Cognac (BNIC), Bureau National Interprofessionnel de l'Armagnac (BNIA) and Fédération des Exportateurs de Vins & Spiritueux de France (FEVS) said they had been "informed" about the outcomes of Barrot's visit to China.
The three groups said they were aware of an announcement from Chinese authorities that final duties would not be brought into force on 5 April, which "potentially opens the door to another extension of the investigation" to 5 July.
They also confirmed being informed about "the possibility of selling the Cognac currently stored in Chinese ports through the duty-free channel".
The BNIC, BNIA and FEVS said Cognac and Armagnac industry members viewed the latest developments "positively", but added that "in substance, these developments do not alter the situation for Cognac exporters," give the provisional taxes they have faced on their imports to China since October.
In October, China's commerce ministry imposed 'provisional dumping measures' on imports of EU-origin brandy.
Since 11 October, companies importing products including brandy have had to pay a security deposit to Chinese authorities upon arrival.
The sum of the deposit is equivalent to tariffs recommended by the commerce ministry in August following the release of a preliminary report of its investigation.
"For Cognac alone, these taxes have effectively excluded them from their second-largest market, resulting in a 72% drop in shipments, particularly for the month of February 2025 alone," the trade bodies said in their joint statement.
China launched its investigation last year after receiving complaints of brandy dumping from the China Liquor Industry Association. The move followed the EU's launch of an anti-subsidy investigation into Chinese electric vehicles in September 2023.
The probe has been assessing dumping allegations made between 1 October 2022 and 30 September 2023 for EU brandy imported in containers of under 200 litres.
While the BNIC, BNIA and FEVS await the outcome of future Franco-Chinese discussions, they stressed: "It is crucial that this initial sign of openness materialises through the formal extension of the investigation by three months, until July 5, 2025. This additional period must be used to find a diplomatic solution to remove our industry from this economic dispute, to which it is entirely unrelated, and which currently threatens to plunge it into a devastating and historic economic and social crisis."
They added that "high-level" negotiations between France and China were due to take place on 15 May, and that the talks needed to focus on "this progress and confirm the visit of our Prime Minister to China to finalise the anticipated agreement that will bring an end to this unjust and unfounded procedure".
"Cognac, Armagnac's caution after French government China talks" was originally created and published by Just Drinks, a GlobalData owned brand.
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