European brandy makers suffer as China launch tit-for-tat probe
- Chinese authorities said the move was prompted by complaints from local producers
China has launched an investigation into French brandy imports as tensions with Brussels continue to rise.
Chinese officials have said they will probe whether European producers of drinks are dumping their products on its market.
This is the process of exporting goods to a country at prices that do not reflect their costs.
It can ultimately push local producers and manufacturers out of business.
And Chinese authorities said the move was prompted by complaints from local producers.
Probe: Brandy is the most-imported spirit into China and comes primarily from France
Brandy is the most-imported spirit into China and comes primarily from France. But the probe from China comes just months after the European Commission president Ursula von der Leyen revealed a similar investigation into imports of Chinese electric cars.
‘Global markets are now flooded with cheaper Chinese electric cars,’ she said in September, despite warnings that this could lead to retaliation from Beijing.
China is a crucial market for European brandy producers, and the news of the tit-for-tat anti-dumping measure sent shares of luxury consumer goods groups tumbling across Europe.
Pernod Ricard fell 5 per cent in Paris. Diageo shares slumped 1.6 per cent in London despite the group not directly importing brandy to China.
But analysts said the company have an indirect exposure at 2-3 per cent of income through its stake in a joint venture with luxury giant LVMH.