China Exempts Top EU Cognac Brands From Anti-Dumping Duty

China has imposed anti-dumping duties on European brandy for five years while exempting major cognac makers that meet a price commitment.

The three leading cognac producers—Rémy Cointreau SA, Pernod Ricard SA, and LVMH’s Hennessy—are among those that reached a pricing agreement with Chinese authorities. I Photo: Rémy Cointreau Facebook

Duties of up to 34.9% were applied to brandy shipments starting July 5, the Ministry of Commerce announced.

However, exemptions apply to producers adhering to a price undertaking made by industry associations and companies from the European Union, James Mayger reported for Bloomberg News.

The three leading cognac producers—Rémy Cointreau SA, Pernod Ricard SA, and LVMH’s Hennessy—are among those that reached a pricing agreement with Chinese authorities.

Their exports to China will not be subject to the anti-dumping duties, as long as they are priced at or above the agreed threshold.

The move comes as a reprieve for EU-based companies, which saw shipments to China plummet after Beijing imposed preliminary duties last year. Those tariffs followed the European Union’s decision to impose duties of up to 45% on Chinese-made electric vehicles (EVs).

LVMH shares pared earlier losses, while Pernod Ricard rose by as much as 1% and Rémy Cointreau by up to 3.9%.

China had twice postponed concluding its cognac investigation as both sides worked to resolve tensions over alcohol and EV tariffs.

Commerce Minister Wang Wentao discussed both matters with the EU Trade Commissioner during a visit to France in June, while Foreign Minister Wang Yi is currently touring Europe.

Still, tensions between the two trading partners remain high. China is reportedly leaning toward canceling part of a two-day summit with EU leaders scheduled for later this month, Bloomberg News reported.s