BEIJING (Reuters) – Beijing said on Thursday it would not impose provisional tariffs on brandy imported from the European Union despite finding it had been sold in China below market prices, giving both sides room to breathe in tense trade talks.
China’s commerce ministry said in a statement it had found that European distillers had been selling brandy in its 1.4 billion-strong consumer market at a margin in the range of 30.6% to 39.0% and that its domestic industry had been damaged.
China has been canvassing the bloc’s 27 member states to reject the European Commission’s proposal to adopt additional duties of up to 36.3% on Chinese-made electric vehicles in an October vote, and the decision not to impose tariffs on brandy could be seen as helpful to its case.
Shares in French spirit makers jumped about 8% after the announcement, though later pared gains as the market digested the full statement.
At 0901 GMT, Pernod Ricard traded 4.4% higher, Remy Cointreau was up 7.7% and Italy’s Campari was 1.68% higher after its shares were earlier automatically halted in Milan when the stock rose 4.5%.
China’s decision came as Pernod Ricard executives presented the company’s full-year results to investors.
Chief Executive Officer Alexandre Ricard said the company would remain prudent on China given the tariff decision appeared to only apply “for now”, but declined to comment further given he had not been able to review the news.
Ricard told Reuters earlier on Thursday that the investigation was ongoing and Pernod had no idea as to its time frame or outcome.
Spokespeople for Pernod and Remy Cointreau did not immediately provide comments. French cognac association Bureau National Interprofessionnel du Cognac did not immediately respond to a request for comment.
Beijing announced its anti-dumping probe on EU brandy in January. Cognac makers say the probe is linked to a broader trade row rather than the liquor market.
As well as the brandy probe, Beijing has opened anti-subsidy investigations into dairy and pork products from the EU in recent months.
The dairy probe was launched last week, the day after Brussels published its revised tariff plan for Chinese-made EVs.
(Reporting by Joe Cash in Beijing, Casey Hall in Shanghai and Emma Rumney in London; Editing by Christian Schmollinger, Mark Potter and Tomasz Janowski)
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