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Following the Trump administration’s measures in 2019<\/a>, China is now taking its turn to target French brandy, exacerbating trade tensions between the European Union (EU) and China. On January 5, 2024<\/strong>, Beijing announced the opening of an anti-dumping investigation into brandy imported from the EU<\/a>, primarily directed against France. This decision follows a complaint lodged by the China Alcoholic Beverage Association<\/strong> on behalf of the domestic brandy industry.<\/p>\n <\/p>\n The Chinese investigation is a direct response to the anti-dumping investigation launched by the European Commission in December 2023<\/strong> on biodiesel imports from China<\/a>. These trade disputes are part of a series of mutual accusations of unfair competition and protectionism between the two parties.<\/p>\n <\/p>\n China imported $1.60 billion<\/strong> worth of distilled wine-based spirits in the first eleven months of 2023, 99.8%<\/strong> of which came from France. This demand, largely driven by cognac, represents a significant share of French exports, with nearly 50 million bottles sold in 2022 in East Asia.<\/p>\n <\/p>\n Three major companies share the Asian cognac market: R\u00e9my Cointreau, Pernod Ricard and Hennessy<\/strong>, owned by the LVMH<\/strong> group. Pernod Ricard generates 10%<\/strong> of its sales in China, with cognac accounting for over 50%<\/strong>.<\/p>\n <\/p>\n <\/p>\n Following the announcement of the Chinese investigation, the share prices of French spirits companies fell significantly. R\u00e9my Cointreau fell 11 points, Pernod Ricard 5 points and LVMH 2 points. Italy’s Campari<\/strong> Group was also down 2%. Last month, Campari acquired the French cognac brand Courvoisier<\/strong><\/a> in a bid to expand its presence in China, where it generates around 9% of its revenues.<\/p>\n <\/p>\n The Association of Cognac Producers in France has said it is cooperating fully with the Chinese authorities, while believing the investigation is linked to a wider commercial dispute. “We are confident that our products and business practices fully comply with Chinese and international regulations,”<\/em> said the Bureau National Interprofessionnel du Cognac (BNIC),<\/strong> which represents French producers.<\/p>\n <\/p>\n If China were to drastically reduce its imports of hard liquor, this would have a major impact on the French spirits industry, which is heavily dependent on exports. Recent events underline the fragility of this market and the need for European players to diversify their commercial partnerships.<\/p>\n <\/p>\n The European Commission has stated that it is assessing the documentation it has received and will intervene in the investigation, where appropriate, in close cooperation with the European industry concerned.<\/p>\n <\/p>\n Wines and Spirits are not enjoying their best day in Asia. Last April, Pernod Ricard had to deal with the Indian justice system. The group was prosecuted for violating the alcohol policy of the Indian capital, New Delhi, and suffered considerable financial losses<\/a>. More recently, the world leader in premium wines and spirits was investigated for alleged collusion with retailers in South India.<\/a><\/p>\n <\/p>\n <\/p>\nImmediate economic impact<\/h2>\n
Protectionist war<\/h2>\n
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