2024-11-12 19:05:00
This Monday, November 11, China announced the implementation of “temporary anti-dumping measures” on spirits imported from Europe. In a press release, the Chinese Ministry of Commerce indicated that these measures would take “the form of a bond or a letter of guarantee”.
The cognac inter-professional association spoke on Tuesday of “a positive signal” the day after the new “temporary anti-dumping measures” by China on brandies imported from the European Union (EU), which will “perhaps be easier to manage”.
Anti-dumping investigation
Since October 11, China has required importers of European brandies (wine-based spirits), of which cognac represents 95% of the total, to post a deposit with Chinese customs, as part of an investigation anti-dumping. The latter is widely seen as a retaliatory measure after France‘s strong support for the EU’s imposition of customs surcharges on electric cars imported from China.
A “gesture of opening”
The director of the BNIC Raphaël Delpech even mentions in the newspaper Sud Ouest “an eminently political message which we perceive as a gesture of openness”. “This shows that the French government’s arguments have been understood by the Chinese authorities,” he adds. Last week, the French Minister for Foreign Trade, Sophie Primas, declared that negotiations remained “clearly open” with Beijing on this subject, without ruling out the option of a response from Paris.
The imposition of these customs surcharges is a hard blow for cognac, which is ultra-dependent on exports (98% of its sales), especially since China is its second largest market (25%). The sector could also see access to its largest market, the United States (38%), become more complicated, since President-elect Donald Trump threatened during his campaign to increase customs duties in all directions. In addition to brandies, China is also carrying out anti-dumping investigations targeting pork and dairy products imported from the EU, posing a threat to these sectors.
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**Interview with Marco Chen, Trade Analyst at the International Institute for Trade**
**Editor:** Good evening, Marco. Thank you for joining us today to discuss the recent announcement from China regarding temporary anti-dumping measures on spirits imported from Europe.
**Marco Chen:** Thank you for having me. It’s a pleasure to be here.
**Editor:** China’s Ministry of Commerce has stated that these measures will take the form of a bond or a letter of guarantee. Can you explain what this means for European exporters?
**Marco Chen:** Certainly. Anti-dumping measures are typically implemented to protect domestic industries from unfair competition. In this case, the bond or letter of guarantee means that European exporters will have to pay a certain amount upfront, which is essentially a financial security. This could potentially raise the cost of doing business in China, and may affect the pricing of their products in the market.
**Editor:** The cognac inter-professional association described the announcement as a “positive signal.” Why would they perceive it that way?
**Marco Chen:** That’s an interesting point. By calling it a positive signal, they might be interpreting this move as an indication that China is acknowledging competition in the market. It suggests that China is looking to regulate imports rather than completely banning them, which could be seen as an opportunity for dialogue and negotiation.
**Editor:** How do you think this will impact the European beverage industry in the short and long term?
**Marco Chen:** In the short term, we may see a dip in exports if companies hesitate to absorb the additional costs. However, in the long run, if the industry adapts well, there could be a stabilization as businesses find ways to navigate these measures. It might also encourage innovation and increased quality to maintain competitiveness.
**Editor:** Given the ongoing trade dynamics, what should European producers keep in mind as they respond to these measures?
**Marco Chen:** European producers should stay informed about the evolving landscape of trade relations with China. They need to engage with Chinese regulators to understand compliance requirements fully and consider their pricing strategies to ensure they remain competitive while coping with these new costs.
**Editor:** Thank you, Marco, for your insights on this situation. It will be interesting to see how this unfolds for both China and European exporters in the coming months.
**Marco Chen:** Absolutely. Thank you for having me.
