[Text/Observer Network Qi Qian] Do you remember the French Cognac industry that has been complaining incessantly since China implemented anti-dumping measures?

Last October, the EU imposed tariffs on Chinese electric vehicles, triggering a trade dispute. China implemented provisional anti-dumping measures on EU brandy, which once "scarred" the French Cognac industry. Since then, the industry has called on the French government to take responsibility and reach an agreement with China.

According to a Reuters report on June 12, in order to break the deadlock in negotiations, the negotiator representing French Cognac brandy producers has proposed a minimum import price of around $20 to $300 per liter to China.

One industry insider said, "We hope for a good result."

A source familiar with the matter said that several weeks ago, a Paris-based law firm representing spirits producers negotiated with China and drafted the minimum import price, sending the price list document to producers for approval.

The file seen by Reuters shows that the price list includes the "minimum import price" for different grades of Cognac. It is worth noting that this refers to the price at which Chinese importers purchase Cognac, while distributors, wholesalers, retailers, and consumers will need to pay a higher price for Cognac brandy.

Based on the aging time of the wine, ranging from the cheapest "Very Special" (VS, 2 years) Cognac, to "Very Superior Old Pale" (VSOP, 4 years and above) Cognac, "Extraordinary Old" (XO, no less than 10 years) Cognac, to the most expensive "Exceptional Extra Old" (XXO, 14 years and above) Cognac, the prices vary from low to high.

Among them, the minimum import price for VS Cognac is 144.7 RMB per liter, and the minimum import price for VSOP is 177.92 RMB per liter. The high-end XO import price is 526.52 RMB, while the XXO category's import price reaches at least 2126 RMB per liter.

Martell Cognac produced in France Visual China

Reuters reported that it is currently unclear what the specific quotes are for various brands of Brandy. However, the price of Hennessy VS Cognac on Chinese e-commerce platforms is about $100 per liter, and the lowest price for Rémy Martin XO Cognac is between $110 and $350, both significantly higher than the prices listed in the table.

Laurence Wyatt, an analyst at Barclays Bank in the UK, said it is unclear whether there have been significant concessions made by the French Cognac industry in their new quote. He mentioned, "The import price is usually one-third to one-half of the retail price."

The report also stated that the above price list reflects the initial quote from the French Cognac industry, and current Sino-French negotiations are still ongoing. A person familiar with the negotiations said that after weeks of repeated negotiations, Sino-French parties seem close to reaching an agreement. However, another person said that the negotiations were very difficult, and the French Cognac industry was being forced into an unfavorable agreement.

The French Cognac Producers Association (BNIC) declined to comment on the disclosed minimum price due to confidentiality in negotiations. However, a spokesperson for the association said, "We have been waiting and hoping for a good outcome."

In September last year, workers of Hennessy in France went on strike French media

Last October, the European Commission ignored China's objections and announced the end of the "anti-subsidy investigation" without justification, insisting on imposing a five-year so-called "final anti-subsidy tax" on Chinese electric vehicles, with a maximum rate of 45.3%.

The Ministry of Commerce of China has announced the implementation of provisional anti-dumping measures on imported EU brandy, covering strong spirits made from distilled wines contained in containers of less than 200 liters originating from the EU. According to the announcement by the Ministry of Commerce, China will impose a deposit rate of 30.6% to 39% on EU brandy brands such as Martell, Hennessy, and Rémy Martin.

Previously, China had initiated investigations into multiple products from the EU, including dairy products, pork products, and chemical products. The European luxury goods industry also felt significant pressure. EU media speculated that China's series of measures were retaliatory actions against the EU's tax increase on Chinese electric vehicles.

In April this year, the Ministry of Commerce announced that the investigation period for this case would be extended until July 5 this year.

Public information shows that the EU is the largest brandy production region in the world, with almost (99.8%, Chinese Customs data) of its exported brandy products coming from the French region. Brands like Pernod Ricard and Rémy Martin have achieved considerable profits in the Asian market.

According to a March report by Le Figaro, exports of French Cognac to China fell by 60% over the past four months. On June 2, Fabrice Barrosso, a French Socialist Party MP representing the Cognac region, urged the French government to reach an agreement with China before the July 5 deadline. He said, "In just February of 2025, exports to China fell by 72%. The Chinese market accounts for 25% of French Cognac sales."

According to a report by Singapore's Lianhe Zaobao, on June 4, during the OECD meeting held in Paris, Franck Riester, the Ministerial Representative for Trade at the French Ministry of Europe and Foreign Affairs, said he believed that China and France could resolve their disputes over Cognac tariffs.

On May 29, the Ministry of Commerce spokesperson responded to the situation regarding the "Anti-Dumping Investigation of Certain Brandy Imports from the EU".

Spokesperson He Yongqian of the Ministry of Commerce said that the anti-dumping investigation of certain brandy imports from the EU by the Ministry of Commerce will expire on July 5, 2025. Currently, the investigating authority is reviewing price commitment applications submitted proactively by EU exporters. The investigating authority will make a final decision based on the facts of the case and in accordance with legal and regulatory investigations. At the same time, we remain open to resolving economic and trade differences through dialogue and consultation.

This article is an exclusive article of Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7515329394966037042/

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