Shares of European spirits makers jump as China drops provisional brandy measures
Adds analyst comments, updates share moves
By Alessandro Parodi and Ozan Ergenay
Aug 29 (Reuters) -Shares in French spirits makers Remy Cointreau RCOP.PA and Pernod Ricard PERP.PA rallied on Thursday after China's commerce ministry said it will not immediately impose provisional anti-dumping measures on brandy imported from the European Union.
The EU in July imposed tariffs on imports of electric vehicles from China, which could use the threat of measures on liquor imports as leverage, two analysts told Reuters.
"There's clearly a complex .. set of interactions at the moment between the EU and China," Bernstein analyst Trevor Stirling said, adding that Cognac and dairy products are potential collateral damage in the process.
Shares in Remy, which jumped more than 12%, were 5.3% higher by 1145 GMT, while Pernod, which climbed as much as 10%, was up 3.3%.
"I think that the market reaction today was to the initial headlines that said no tariffs for now," Barclays analyst Laurence Whyatt said, adding that investors then likely recognised that tariffs could be imposed at a later date.
China's commerce ministry said in a statement that investigating authorities had determined that dumping had taken place and that its domestic brandy industry had been threatened.
It added that the investigation had found European distillers selling brandy at a margin of 30.6%-39.0% and left open the possibility to act at some time in the future.
Citi said that if dumping margins were translated into additional tariffs, its analysts would expect Chinese retail price increases of about 16% and 20% for Pernod and Remy, respectively, with an estimated impact on group earnings per share (EPS) of about 2% and 8%.
"Our discussions with investors suggest most were expecting – and share prices were already discounting – around a 50% incremental cognac tariff rate," the bank said.
Pernod Ricard's CEO Alexandre Ricard refused to immediately comment on the decision as he hosted the company's yearly results on Thursday.
The French cognac industry makes up almost all of China's EU brandy imports. Beijing announced the probe in January, weighing on sentiment towards producers like Remy, which makes some 70% of its sales from cognac, with China its most profitable market for the brandy.
Shares in Italian spirits maker Campari CPRI.MI and Johnnie Walker whisky maker Diageo DGE.L also jumped briefly after the announcement, but were last up 1.4% and down 1.9%, respectively.
German carmakers Volkswagen VOWG_p.DE and BMW BMWG.DE, which have also been under pressure on uncertainty over how China might respond to the EU's new tariffs on imported Chinese EVs, rose slightly on the news.
Shares in BMW BMWG.DE, Porsche P911_p.DE and Mercedes-Benz MBGn.DE were up 0.1%, 1.1% and 0.6%, respectively.
"This looks like a negotiation tactic from China," Barclays' Whyatt said. "Can they persuade the EU to roll back some of the measures that have been imposed?"
FACTBOX-Spirits makers exposed to China's EU brandy probe https://www.reuters.com/business/retail-consumer/spirits-makers-exposed-chinas-eu-brandy-probe-2024-01-05/
Reporting by Alessandro Parodi and Ozan Ergenay; editing by Jason Neely and Shri Navaratnam, Kirsten Donovan
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
