China's Ministry of Commerce recently announced that it will not impose immediate anti-dumping duties on European Union brandy imports, despite uncovering substantial evidence that these products are being dumped in the Chinese market with margins ranging from 30.6% to 39.0%.
The decision comes after a thorough preliminary investigation, which confirmed that the dumping of EU brandy poses a significant threat of material injury to China’s domestic brandy industry. However, the Ministry has opted not to implement provisional measures at this time.
The investigation specifically focused on major European brands, including Martell & Co, Société Jas Hennessy & Co, and E. Rémy Martin & Co. The Ministry found that these companies were engaging in dumping practices, with Société Jas Hennessy & Co having the highest dumping margin at 39.0%, followed by E. Rémy Martin & Co at 38.1%, and Martell & Co at 30.6%. Despite these findings, the Ministry has not provided any indication as to when or if anti-dumping duties might be imposed on these imports, leaving the situation in a state of uncertainty.
This development aligns with the timeline that was first reported by Vino Joy News, which anticipated a decision by the end of August. The Ministry’s announcement is part of its preliminary ruling on an anti-dumping investigation that was launched in January at the request of China’s domestic brandy producers. The investigation determined that the dumping activities of these EU companies had a direct causal link to the potential harm facing China’s brandy industry, highlighting the precarious position of local producers who are struggling to compete with the influx of low-priced EU imports.
Interestingly, the Ministry's approach in this case contrasts with its handling of a similar situation involving Australian wine imports. In that case, the Ministry implemented deposit requirements following a preliminary ruling. The absence of such measures in the current case may suggest a more cautious or strategic approach, possibly due to the complexities of trade relations between China and the European Union.
The Ministry did, however, provide a window for further engagement, stating that stakeholders have 10 days from the ruling’s publication to submit written feedback. This period allows for additional input before any final decisions are made regarding the imposition of duties.
The scope of the ongoing investigation covers all EU brandy imports, with the exception of those packaged in containers of 200 liters or more. The investigation has been thorough, beginning on January 5, 2024, after China's domestic brandy industry requested the probe. By March 28, the Ministry had zeroed in on the primary companies under scrutiny: Martell, Hennessy, and E. Rémy Martin.
In April, Chinese Commerce Minister Wang Wentao traveled to Paris, where he met with representatives from French brandy companies. During the meeting, he emphasized that the investigation was not targeted at any specific EU member state and assured that no conclusions had been predetermined. This diplomatic engagement underscores the sensitive nature of the issue, as China seeks to balance the protection of its domestic industries with maintaining stable trade relations with key EU partners.
A hearing on the case was held on July 18, bringing together 26 interested parties and approximately 80 participants. This hearing provided a platform for all stakeholders to present their views and arguments, further informing the Ministry's decision-making process.
Ultimately, the preliminary ruling issued on August 29 confirmed the presence of dumping but stopped short of taking immediate action against the involved companies. The decision to hold off on imposing anti-dumping duties at this stage leaves room for further negotiations and considerations, reflecting the complexities of international trade dynamics and the careful deliberation required in such cases.
As the situation develops, all eyes will be on the Ministry of Commerce's next steps and the potential impact on the broader trade relationship between China and the European Union.
Source: Vino-Joy