China has extended its anti-dumping investigation into EU brandy products, particularly Cognac, by three months. This extension allows for a temporary uplift in duty-free sales, which have been hampered by previous tariffs. The investigation was prompted by complaints regarding dumping practices and reflects ongoing trade tensions between the EU and China.

Reports indicate that China has postponed concluding its anti-dumping investigation into EU brandy, particularly Cognac. French Foreign Minister Jean-Noël Barrot noted during his visit to China that the conclusion of the probe would be delayed by three months, allowing for a temporary reprieve in duty-free sales of Cognac and Armagnac, which are vital for numerous brands.

China’s Ministry of Commerce initially commenced this investigation on January 5, 2024, which was scheduled to last for one year but has now been extended by an additional three months. Cognac producers, including Pernod Ricard, have faced difficulties selling in duty-free markets during this period. CFO Hélène de Tissot highlighted the adverse effects of the suspension on sales in a call with analysts.

Following the recent announcements, the Bureau National Interprofessionnel du Cognac (BNIC) expressed the need to assess the implications of the government’s updates. It is important to note that existing tariffs on brandy imports remain in place despite the investigation’s delay. These tariffs were enacted in October, which also mandated a security deposit for importing EU brandy.

The investigation stems from complaints lodged by the China Liquor Industry Association concerning brandy dumping and is focused on imports of EU brandy in containers under 200 liters. This action aligns with the broader context of trade disputes, as the EU previously initiated an anti-subsidy probe into Chinese electric vehicle imports.

In summary, China’s decision to delay the conclusion of its anti-dumping investigation into EU brandy products provides temporary relief for Cognac and Armagnac sales amidst ongoing trade tensions. While companies face existing tariffs and conditions for importing brandy, this extended probe highlights the complexities of international trade relationships and their impacts on specific industries, particularly the Cognac sector’s operations in duty-free markets.

Original Source: www.just-drinks.com

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