China’s Ministry of Commerce (MOFCOM) announced an extension of the anti-dumping probe into EU brandy due to what the ministry cited as “the complexity of the case”, signaling a potential easing of trade tensions.
The probe, originally scheduled to conclude within a year, will now run until April 5, 2025, the ministry announced on Dec. 25, 2024.
The extension follows an application from EU exporters for price undertakings and requests for legal protection from China’s domestic brandy industry, MOFCOM spokesperson He Yongqian said during a press briefing the following day.
“Considering the complexity of this case and at the request of the EU, the investigating authority decided to postpone the final ruling,” He said.
On Jan. 5, 2024, China announced an anti-dumping probe into the EU’s brandy imports and released a preliminary ruling on Aug. 29, 2024, stating that the products were being dumped in the Chinese market. Starting Oct. 11, 2024, MOFCOM began imposing anti-dumping deposits ranging from 30.6% to 39.0% on EU-imported brandy.
According to MOFCOM, the dumping ruling was based on the threat posed by a large volume of EU brandy imports to domestic products. In the preliminary ruling, MOFCOM noted that by the end of the investigated period (January to September 2023), EU brandy imports had significantly increased their market share by 22.79%, resulting in a total market share of over 50%. During the same period, the market share of domestic brandy fell to under 45%.
Despite this decision, price was never considered a factor in determining dumping for EU brandy imports. “In the past few years, sales of EU brandy in China have experienced tremendous growth, but the prices have always been higher than those of domestic brandy,” said a Chinese importer of French brandy who spoke on condition of anonymity.
“If dumping were the case, it should be classified as high-price dumping,” he continued. As a result, EU brandy exporters were able to apply for price undertakings.
The scale of EU brandy exports to China has decreased over the past year. From January to November 2024, French brandy—accounting for 99.18% of China’s imported brandy market—experienced a decline in import volume of 20.25% and a decrease in value of 27.41%.
Signal of Tension Easing
Tensions between China and the EU over brandy issues had softened since November. On Nov. 3, 2024, during the China International Import Expo in Shanghai, Wang Wentao, the Minister of Commerce in China, met with Sophie Primas, French Minister Delegate for Foreign Trade and French Nationals Abroad. Officials from both countries discussed trade cooperation and exchanged views on EU trade remedy cases.
Following their conversation, on Nov. 11, 2024, MOFCOM issued a supplementary notice stating that, starting Nov. 15, 2024, EU brandy importers could provide financial guarantees instead of cash deposits.
In a broader context of the China-EU trade relationship, both sides announced on Nov. 13, 2024, that a “technical consensus” had been reached regarding tariffs on China-made electric vehicles (EVs).
China’s anti-dumping investigation into EU brandy imports was viewed as retaliation for the EV tariff dispute, according to Yuyuan Tantian (玉渊谭天), China’s state-owned media-affiliated social media account.
In response to China’s anti-dumping measures, the EU requested consultations with China through the World Trade Organization on Nov. 25, 2024.
Importers in China are seeking an amicable resolution to the anti-dumping issue. “As a brandy importer, we certainly hope for lower costs, so we definitely do not want any additional taxes,” stated the aforementioned French brandy importer.
Vino Joy News will keep providing the latest updates on this case.
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