In a significant step toward resolving a major trade dispute, French brandy producers and China’s Ministry of Commerce have reached a preliminary pricing agreement, signaling a possible resolution to Beijing’s ongoing anti-dumping investigation into European brandy imports.
The development suggests a thawing of trade tensions that have impacted not only Cognac sales but also wider EU–China commercial relations.
The Context: Anti-Dumping Probe and Tariffs
China’s anti-dumping investigation into European brandy, launched in January 2024, specifically targeted French Cognac — an iconic product and cultural export. In August, the Chinese Ministry of Commerce issued a preliminary ruling, claiming there was sufficient evidence of dumping practices, and imposed provisional duties ranging from 30.6% to 39% on brandy imports.
The duties, combined with other procedural hurdles such as customs delays and restrictions on duty-free shipments, significantly disrupted exports from France’s top Cognac producers — including Hennessy, Rémy Martin, and Martell. Some brands vanished from duty-free sales channels, and no duty-free brandy imports were recorded in early 2025, according to customs data.
A Potential Breakthrough: Price Commitment Proposal
Now, there are signs of a breakthrough. On June 10, Chinese state broadcaster CCTV reported that France’s brandy producers had voluntarily submitted a pricing commitment proposal to China. The Ministry of Commerce confirmed a consensus on “core terms” of the proposal had been reached.
Under China’s anti-dumping laws, a price commitment is a formal agreement wherein exporters voluntarily raise their export prices or adjust sales practices to avoid penalties. If finalized and accepted by Beijing, this would replace punitive tariffs with a regulated price structure — offering exporters more certainty while addressing China’s regulatory concerns.
Details of the proposed price mechanism have not yet been made public. A final decision, including whether to accept the commitment and end the investigation, is expected by July 5.
A Broader Diplomatic Context
The timing of this development is notable. It coincides with the final stages of EU–China negotiations on tariffs related to electric vehicles. Many analysts believe that the two disputes — China’s probe into EU brandy and the EU’s anti-subsidy investigation into Chinese EVs — are being used as bargaining chips in broader trade diplomacy.
French Trade Minister Laurent Saint-Martin recently emphasized the importance of resolving the Cognac issue as a symbolic and economic gesture. “This investigation touches on France’s national identity,” he said at an OECD meeting. “Resolving irritants like the case of Cognac helps strengthen diplomatic ties in a troubled international environment.”
Cognac in China: Cultural Icon, Commercial Challenge
France’s Cognac sector has long enjoyed a prestigious position in China, particularly in regions like Guangdong where brandy is a staple of business banquets and upscale nightlife. Brands like Hennessy and Rémy Martin have historically been regarded as luxury status symbols, embedded in social and gifting cultures.
But the landscape is shifting. Demand has softened, regulatory friction has increased, and consumer sentiment remains cautious amid broader economic uncertainty. LVMH, owner of Hennessy, reported a 35.7% drop in wine and spirits profits for 2024. Rémy Cointreau’s sales fell 17.5%, prompting large-scale furloughs and cost-cutting.
Industry analysts warn that even if the anti-dumping dispute is formally resolved, French producers will need to reinvest in marketing, rebuild trust, and reestablish distribution channels to recover their former position in the Chinese market.
Conclusion: Toward Normalization — But Not Yet Relief
The preliminary pricing agreement is a positive signal for both sides, suggesting a willingness to stabilize trade relations and avoid further escalation. However, much hinges on whether the agreement is finalized and what enforcement mechanisms are adopted.
With China expected to issue a final ruling by early July, the next few weeks will be crucial for the future of French brandy in China — and possibly for the broader EU–China trade dynamic.
Source: Vino-Joy