Cognac, Armagnac… China begins an investigation into products imported from France

Strong alcohol at the center of the Sino-French war. China said on Friday it had launched an anti-dumping investigation into wine spirits such as cognac imported from the European Union (EU), amid trade tensions between the two economic powers.

The initiative follows a complaint filed in November by the China Liquor Association on behalf of China’s wine liquor sector, according to China’s Ministry of Commerce.

“This request contained evidence necessary to initiate an anti-dumping investigation in accordance with Chinese regulations,” the ministry said in a statement published on its website.

The investigation, launched this Friday, focuses on suspected dumping between October 1, 2022 and September 30, 2023, as well as potential damage to the sector in China between January 1, 2019 and September 30, 2023. It must be completed by January 5th. 2025, but could possibly be extended by six months in the event of “special circumstances,” the press release said.

“Our business practices are fully compliant.”

Dumping is a practice that consists, in particular, of selling goods abroad at prices lower than those on the national market. China imported more wine brandy than any other spirit in 2022, according to a Daxue Consulting report that found most imports came from France.

Among the wine spirits produced in the EU, cognac and Armagnac, both produced on French soil, stand out.

“This investigation is part of a commercial dispute between the European Union and China in other industries not related to our activities,” the National Interprofessional Cognac Bureau states in a shared press release, where it assures that “Cognac producers will fully cooperate with Chinese authorities will answer any questions they may have.”

“We are confident that our products and business practices are fully compliant with Chinese and international regulations and that the EU and China will find a constructive way to resolve any bilateral disputes, as has happened in the past on other issues,” he adds.

“Open protectionism” versus “fair competition”

Relations between Beijing and Brussels have been strained since the European Union said it was seeking to reduce its commercial dependence on China, especially in technology.

Concerned about competition from Chinese electric vehicles in the European market and pressure from France, European Commission President Ursula von der Leyen announced in September an investigation into Chinese subsidies for electric vehicles. China condemned the investigation as “pure protectionism” and stressed that it could harm Sino-European trade relations.

Asked at a press conference in Brussels on Friday, Ms von der Leyen did not comment specifically on the Chinese alcohol investigation but insisted on the importance of “fair” competition with China.

“There must be transparency regarding the type of subsidies provided and the circumstances under which they are provided,” the official continued. She added that the EU agreed with Chinese leaders at a summit in December to “address all complaints point by point” about the difficulties European companies face in accessing the Chinese market.