Pernod Ricard and Remy Cointreau face anti-dumping investigation in China

A Chinese anti-competitive investigation is targeting EU alcohol imports into the Middle Kingdom, following a complaint from the China Alcoholic Beverages Association. Following this announcement on Friday January 5, the financial markets reacted sharply, with significant falls in the values of European spirits brands. Against a backdrop of Sino-European tensions, this investigation raises concerns about the crucial economic relationship between China and French spirits producers.


China recently announced the launch of an antitrust investigation into imports of spirits from the European Union, in particular “brandy obtained by distilling grape wine in containers holding less than 200 liters”.


This move follows a complaint lodged by the China Alcoholic Beverages Association, representing the local wine brandy industry.


The consequences of this investigation, initiated by the Chinese Ministry of Commerce, have already been felt on the financial markets, with a significant fall in the values of spirits groups. On the Paris Bourse on Friday, January 5, Remy Cointreau was the biggest faller on the SBF 120, shedding 12.16%, while Pernod Ricard, less focused on wine spirits, dropped 5.48%. Luxury goods giant LVMH, which markets Hennessy cognac, also lost 2.21%.


In London, the Diageo group, which specializes in spirits, was down 2.35%.


Worsening diplomatic context


The Chinese investigation comes against a backdrop of growing tensions between China and the European Union. China had adopted a similar approach in 2013 when investigating wine imports from the EU, in response to proposed European tariffs on Chinese photovoltaic panels.


Analysts believe that China is seeking to put pressure on the EU, particularly France, by targeting exports of brandy packaged in containers of less than 200 liters. China will import $1.57 billion worth of spirits distilled from grape wine in 2023, with France accounting for 99.8% of all EU brandy exports.


China represents a crucial market for French spirits groups, with 10% of sales for Pernod Ricard and 30% for Remy Cointreau. However, companies are keeping a low profile in the face of this investigation. Remy Cointreau declined to comment, and Pernod Ricard and LVMH were not immediately available for comment.


Experts unanimous


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Featured photo : © Remy Cointreau

Picture of Hugues Reydellet
Hugues Reydellet
Hugues Reydellet is a young and passionate journalist whose favorite subjects are economy, culture, gastronomy, but also cars, and sports. With a sharp pen and an insatiable curiosity, Hugues is constantly on the lookout for new hot information to report.

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