Just as China and Australia are inching towards Beijing removing, or at least reducing, the tariffs of up to 218% it slapped on Australian wine two years ago, China has now begun an anti-dumping investigation into all brandy imported from the European Union (EU).
The measure is effectively targeted at Cognac and is being seen as a further example of China’s willingness to use its economic muscle in disputes, especially when it can affect spending on imported goods that have no direct impact on its own economic output.
Customs data show that China imported US$1.57 billion worth of spirits from distilled grape wine in the 11 months to the end of November with France accounting for 99.8% of all EU brandy exports.
Cognac is by far the biggest-selling imported spirit category in China because of its luxury cachet.
In 2022 China came closer to eclipsing the United States as Cognac’s biggest export market which took 50% of the spirit’s global exports.
Although the post-Covid revival in spending was less buoyant than expected, the fact that Americans have turned away from Cognac could mean that China will have moved much closer to the top spot when figures for 2023 are released.
Trade wars
Brussels and Beijing are becoming increasingly belligerent over trade, with each side accusing the other of using unfair practices.
In September, the EU said it would begin an anti-dumping investigation into imports of electric vehicles and components from China. Last month it extended that to also cover biodiesel products.
Beijing’s said its investigation will cover all brandy from the EU in containers of less than 200 litres.
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