China imposes tariffs on EU brandy, spares major cognac makers

China has announced final anti-dumping duties of up to 34.9 per cent on brandy imported from the European Union, following a months-long investigation that concluded EU producers were selling the spirit at unfairly low prices. The duties will be effective for five years starting July 5, the Ministry of Commerce said in a statement. However, in a relief to French cognac makers, key players such as Martell & Co (owned by Pernod Ricard) and Rémy Martin (owned by Rémy Cointreau) will be exempt from the tariffs, provided they adhere to previously agreed minimum price commitments.

The price undertakings, accepted by Beijing following a legal review, allow participating companies to avoid the steep duties if they commit to not undercutting the Chinese market. The ruling stems from an anti-dumping investigation launched in January 2024 in response to a complaint from the China Alcoholic Drinks Association. The probe found that European brandy, particularly French cognac, posed a material threat to China’s domestic industry by being sold below fair market value.

Retaliation amid broader trade dispute

The decision comes amid rising trade tensions between China and the EU, particularly over Brussels’ move to impose tariffs of up to 45 per cent on Chinese-made electric vehicles. French cognac producers claim they are collateral damage in a geopolitical trade standoff unrelated to the spirits sector. Monthly cognac exports to China, traditionally the most valuable market for the spirit, have plunged by as much as 70 per cent since preliminary duties were announced last year, according to the Bureau National Interprofessionnel du Cognac (BNIC).

The announcement initially rattled European markets, with shares of Pernod Ricard, Rémy Cointreau, and LVMH (owner of Hennessy and Rémy Martin) dropping in early trading. Losses were pared back after confirmation that major producers would be spared full duties under the price commitment scheme.

Trade group spiritsEUROPE expressed disappointment over the ruling, calling the duties “a significant barrier to legitimate trade,” but welcomed the exemption for certain companies. It urged Chinese authorities to extend the exemption framework more broadly to other EU exporters.