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EU brandy hit with anti-dumping penalty from China
China will impose provisional tariffs on brandy from the European Union (EU) as trade tensions escalate between Beijing and Brussels.
Today (8 October), the Chinese Ministry of Commerce (MOFCOM) said it would impose provisional anti-dumping duties against imports of European brandy from Friday 11 October.
At the end of August, MOFCOM said it would not apply anti-dumping measures on EU brandy and Cognac ‘for the time being’.
Dumping is when a company sells a product in a foreign market at a price that is lower than the price it charges in its home market. The practice is considered unfair as the price in the overseas market would not reflect the true value of the product.
However, China has U-turned on its previous declaration after the EU approved additional duties of up to 35% on Chinese electric vehicles.
From Friday, European brandy makers exporting to China will have to provide security deposits based on provisional anti-dumping duties.
Trade association SpiritsEurope warned it would have an ‘extremely negative impact’ on EU-based producers.
“Today’s decision means that, at an extremely short notice, EU producers will be hit by a significant additional financial burden when exporting EU wine-based and marc-based products to China,” said Ulrich Adam, director general of SpiritsEurope.
“We call on the European Commission to redouble efforts to find a negotiated solution with its Chinese counterparts urgently.”
Last week, after the EU approved the Chinese electric vehicle tariff, Cognac’s national trade body, the Bureau National Interprofessionnel du Cognac (BNIC), warned about the implications of the vote.
A statement said: “A European vote has just confirmed the application of taxes on Chinese electric vehicles, reinforcing the imminent threat of surtax on Cognac exports to China.
“Once again, we note that our requests to postpone the vote and for a negotiated solution have been ignored. The French authorities have abandoned us. We do not understand why our sector is being sacrificed in this way.
“Nevertheless, we hope that common sense will prevail. Dialogue must continue to reach a negotiated solution that would prevent our products from facing a surtax that could exclude them from the Chinese market.”
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