Trade group SpiritsEurope has urged the EU Commission to negotiate with China over plans to introduce high duty fees on wine and spirits – claiming the sector has become a “collateral victim of a broader trade conflict”.
The Chinese Ministry of Commerce (Mofcom) unveiled proposals to introduce provisional anti-dumping duties of 34.8% on imports of EU wine-based and marc-based spirits such as brandy.
Beijing said last week the duties would not be applied for now, despite claiming to find evidence that EU brandy had been sold in China below market prices.
Following an investigation opened in January this year, Mofcom said it had found that European distillers had been selling brandy in the country at a dumping margin in the range of 30.6% to 39%, which had negatively impacted its domestic industry.
SpiritsEurope claimed EU producers had provided evidence that no dumping occurred, and said it was “disappointed” by the announcement – which could significantly impact spirits exports to China, a major destination for these beverage categories and the world’s largest spirits market.
The commerce ministry held plans to go ahead with the duties “for now”.
“The tariffs, if applied, would constitute an unjustified market access barrier and have a detrimental impact on EU exports of wine-based and marc-based spirits to China, which represent the lion’s share (around 90%) of direct EU spirits exports to China in value”, said SpiritsEurope director general Ulrich Adam.
“This decision is all the more incomprehensible because our sector has fully co-operated with the Chinese authorities throughout the entire investigation process initiated in January 2024 and has demonstrated complete transparency in its practices. The only silver lining at this stage is that the provisional duties will not apply for now.”
It is the latest development in the escalating trade war between Beijing and Brussels, prompted by EU proposals to adopt additional duties of up to 36.3% on Chinese-made electric vehicles from October.
It is widely accepted that China’s decision to hold off on the duties could work as a leverage, as EU member states decide whether to vote for the EV tariffs or not.
An EU Commission spokesperson said in a statement the probe development would not influence its decision on EV duties, and that the executive’s own assessments showed the investigation findings were “questionable.”
Adam argued the spirits sector had become “a collateral victim of a broader trade conflict, which will limit the access of Chinese consumers to products they greatly value and appreciate, if not resolved as a matter of priority”.
He added: “The evidence the brandy sector provided throughout the investigation demonstrated that the conditions for initiating an investigation were not met. In contrast, the evidence of dumping, injury, and causal link provided in the application was insufficient to justify the initiation of an investigation.”
SpiritsEurope is calling for the “full support” of the European Commission for immediate negotiations to “ensure these provisional duties never apply”.
The liquor sector is not the only food & drink sector to be caught in the midst of the trade war.
Beijing has also recently launched an anti-subsidy investigation into pork and dairy products from the EU, just a day after Brussels published revised tariff proposals for Chinese-made electric vehicles.
The outcome of the investigation could impact not just the EU pork market but also have a ripple effect across the global market, Rabobank experts warned.
“A suspension of EU exports or high tariffs could mean global pork trade flows are rerouted as China finds new origins and EU exports flow to other regions,” said Chenjun Pan, senior analyst (animal protein) at RaboResearch.
“If EU exporters offer discounts to capture new markets, importing countries may need to support and protect local producers. Meanwhile, other exporting countries may find their traditional trade partners shift to cheaper EU pork products.”
No comments yet