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Investing.com - China’s has slapped duties of up to 34.9% over a five-year period on brandy imported from the European Union, the country’s Commerce Ministry said in a statement on Friday.
The levies, which will take effect from July 5, come after an anti-dumping investigation launched last year into European brandy, which is mostly comprised of cognac from France.
However, some companies that had previously agreed to minimum price commitments, such as Remy Cointreau (EPA:RCOP)’s Remy Martin and Pernod Ricard-backed Martell & Co, will not face the higher tariff rate unless those pledges are breached, the Commerce Ministry said.
According to data from industry body Bureau National Interprofessionnel du Cognac, exports of the drink to China -- a major market for the beverage -- have slipped by as much as 70%.
Cognac makers in France have claimed that that have been caught in the middle of an extended trade spat between China and the European Union over levies on Chinese-made electric vehicles. The EU has accused Beijing of unfairly bolstering its EV industry with subsidies and has placed tariffs on these cars manufactured in China.
In June, Reuters reported that French cognac groups had notched a tentative deal establishing minimum import prices for the Chinese market, although sources told the news agency that Beijing will only finalize the pact if progress is made in the disagreement over EVs.
Along with the pressures from China, France’s cognac companies have also been hit by flagging sales in the United States, the world’s largest market for the drink by volume. A combination of inflation and broad economic uncertainty have weighed on cognac demand in the country.
(Reuters contributed reporting.)