Almost a month before the Chinese New Year, a traditional high point for cognac consumption in the former Middle Kingdom, an announcement from Beijing had the effect of a cold shower for the producers of the precious brandy Charente. The Chinese Ministry of Commerce announced on Friday January 5 the launch of an anti-dumping investigation into wine spirits, such as cognac, imported from the European Union.
The initiative follows a complaint filed in November by the China Liquor Association on behalf of the country’s wine spirits sector, the ministry said. It would concern suspicions of dumping between 1er October 2022 and September 30, 2023, as well as potential damage to the sector in China between September 1er January 2019 and September 30, 2023.
The launch of this investigation should be compared with the tightening of commercial relations between Beijing and the European Union, wishing to reduce its dependence on China, particularly in the technological field. Faced with stiff competition from Chinese electric vehicles on the European market, the President of the European Commission Ursula von der Leyen announced, in September 2023, the opening of an investigation into Chinese subsidies for electric cars. This approach, supported by France, was roundly denounced by China, considering it protectionist. Beijing warned that it could damage Sino-European trade relations.
French groups disrupted on the stock market
The opening of an investigation into anti-competitive practices in the wine spirits sector can therefore be interpreted as a response. Especially since France, the land of production of cognac, an alcohol very popular in China, is on the front line of this attack. Immediately, Friday January 5, the prices of the French spirits groups Pernod Ricard and Rémy Cointreau were disrupted on the stock market. They met again on Monday January 8 in session. If the groups refused to comment, their representative, the Bureau national interprofessionnel du cognac (BNIC), stepped up to reassure the markets.
The organization considers that the level of dumping cited to justify the investigation into wine spirits imported from the European Union is low: almost 16% difference between the prices charged on the domestic market and export prices, which raises the question of the real issue of this approach. The BNIC says it is confident of being able to demonstrate that the business practices of its members comply with Chinese and international regulations.
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