China will not impose anti-dumping measures on EU brandy for now
China found EU brandy sold below market prices
EU Commission says probe will not affect EV duties decision
French spirit makers' shares rise
Concerns over future tariffs remain
Proposed provisional duties better than feared, Citi says
Adds Remy Cointreau comment in paragraph 21
By Casey Hall, Alessandro Parodi and Emma Rumney
SHANGHAI, Aug 29 (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 dumping margin in the range of 30.6% to 39% and that its domestic industry had been damaged.
"Provisional anti-dumping measures will not be taken in this case for the time being," the ministry said, leaving open the possibility Beijing may act in the future.
Previously, the ministry had said the probe was expected to end before Jan. 5, 2025, but that it could be extended "under special circumstances".
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.
"This looks like a negotiation tactic from China," Barclays analyst Laurence Whyatt said, expecting to see a link between EU tariffs on Chinese EVs and Chinese action on EU brandy imports.
"Can they persuade the EU to roll back some of the measures that have been imposed?"
An EU Commission spokesperson said the development would not influence its decision on EV duties, describing the two investigations as "separate tracks".
In a statement, the EU executive said it was following the investigation "very closely" while its detailed assessment showed the merits of the investigation were "questionable."
"The Commission will therefore follow the investigation carefully to ensure WTO rules are being followed ... and will not hesitate to take all necessary actions to defend EU exporters," the statement said.
FRENCH TARGET
France was seen as the target of Beijing's brandy probe due to its support of tariffs on China-made EVs. It also accounted for 99% of China's brandy imports last year.
French exports to China of dairy products that Beijing is investigating totalled 179 million euros ($198 million) last year, about 35% of the EU's total, according to Eurostat.
French cognac association Bureau National Interprofessionnel du Cognac (BNIC) said China's provisional decision did not put its concerns about eventual tariffs to rest.
Duties if imposed would "heavily impact" cognac exports to China, which accounts for a quarter of its exports, it said.
"An entire sector would thus become the collateral victim of a conflict beyond its control ... We expect France and the European Union to immediately negotiate for the non-application and abandonment of these duties," the statement added.
SPIRITS RALLY
Shares in French spirit makers jumped about 8% after the announcement, though they later pared gains as the market digested the full statement.
If implemented, imports of Martell, which is owned by Pernod Ricard PERP.PA, could incur import tariffs of 30.6%, Hennessey, owned by LVMH LVMH.PA, 39% and Remy Martin which is part of Remy Cointreau RCOP.PA 38.1%, based on a list of dumping margins per firm published by China's Commerce Ministry.
That is better than the 50% feared by investors, according to Citi analysts.
At 1400 GMT, Pernod traded 2.7% higher, Remy was up 3.67%, LVMH was up 1.2% and Italy's Campari CPRI.MI was 1.04% higher.
Pernod Chief Executive Alexandre Ricard said the company would remain prudent on China given the tariff decision appeared to only apply "for now," but did not elaborate further.
Remy said in a statement it would continue to cooperate with authorities and invest in China, but would also assess "all options and growth opportunities" to mitigate any negative impact from Beijing's final decision.
LVMH said the BNIC was representing it in this case.
Citi analysts estimated that Chinese retail prices for Pernod and Remy would increase by about 16% and 20% and cut their Chinese sales by 13% and 16% respectively, if the tariffs were imposed.
That would hurt their earnings per share (EPS) by about 2% and 8%.
Beijing announced its anti-dumping probe on EU brandy in January. Cognac makers have maintained that 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.
The dairy probe was launched last week, the day after Brussels published its revised tariff plan for Chinese-made EVs.
The Spanish government, which had supported the EU EV probe in a preliminary vote in July, declined to comment on Thursday.
($1 = 0.9011 euros)
2023 Imports of EU products affected by China's trade investigation https://reut.rs/4fVWces
Spirits-maker shares rebound after China drops tariff probe https://reut.rs/3WXknAg
Spirits-maker shares rebound after China drops tariff probe https://reut.rs/3WXkkEA
EU-China trade in goods https://reut.rs/4elcJaj
Reporting by Casey Hall in Shanghai, Joe Cash in Beijing, Emma Rumney in London, Philip Blenkinsop in Brussels, Alessandro Parodi and Ozan Ergenay in Gdansk;
Additional reporting by Harry Robertson in London, Andrey Khalip in Lisbon and Mimosa Spencers in Paris; Editing by Christian Schmollinger, Mark Potter, Josephine Mason, Tomasz Janowski, Alexander Smith and Barbara Lewis
අදාළ වත්කම්
නවතම පුවත්
වියාචනය: XM Group සමාගම් ක්රියාත්මක කිරීම පමණක් වන සේවා සපයන අතර වෙබ් අඩවියේ හෝ වෙබ් අඩවිය හරහා ලබා ගත හැකි අන්තර්ගතය බැලීමට සහ/හෝ භාවිත කිරීමට පුද්ගලයෙකුට ඉඩ සලසමින් අපගේ මාර්ගගත වෙළඳ පහසුකම වෙත ප්රවේශය ලබා දෙන අතර වෙනස් කිරීමට හෝ පුළුල් කිරීමට අදහස් නොකරයි. එවැනි ප්රවේශය සහ භාවිතය සෑම විටම (i) නියමයන් සහ කොන්දේසි, (ii) අවදානම් අනතුරු ඇඟවීම් සහ (iii) සම්පූර්ණ වියාචනයට යටත් වේ. එබැවින් එවැනි අන්තර්ගතයක් සාමාන්ය තොරතුරුවලට වඩා වැඩි යමක් සපයා නොමැත. විශේෂයෙන්ම, අපගේ මාර්ගගත වෙළඳ පහසුකමේ අන්තර්ගතය පෙළඹවීමක් හෝ මූල්ය වෙළඳපොළවල කිසිදු ගනුදෙනුවක් සිදු කිරීමට ඉදිරිපත් කිරීමක් නොවන බව කරුණාවෙන් සලකන්න. ඕනෑම මූල්ය වෙළඳපොළක වෙළඳාම් කිරීම ඔබේ ප්රාග්ධනයට සැලකිය යුතු අවදානමක් එක් කරයි.
අපගේ මාර්ගගත වෙළඳ පහසුකමේ ප්රකාශිත සියලු කරුණු අධ්යාපනික/තොරතුරුමය අරමුණු සඳහා පමණක් අදහස් කෙරෙන අතර මූල්ය, ආයෝජන බදු හෝ වෙළඳ උපදෙස් සහ නිර්දේශයන්; හෝ අපගේ වෙළඳ මිල පිළිබඳ වාර්තාවක්; හෝ ඕනෑම මූල්ය උපකරණයක ඉදිරිපත් කිරීමක් හෝ ඒ සඳහා පෙළඹවීමක්; හෝ විශේෂ ඉල්ලීමකින් තොරව ඔබ වෙත ලබා දෙන ලද මූල්ය ප්රවර්ධනයන් ලෙස නොසැලකිය යුතුය.
ඕනෑම තෙවන පාර්ශවීය අන්තර්ගතයක් මෙන්ම XM විසින් සකසන ලද අන්තර්ගතය එනම් අදහස්, පුවත්, පර්යේෂණ, විශ්ලේෂණ, මිල ගණන් සහ වෙනත් තොරතුරු හෝ මෙම වෙබ් අඩවියේ අන්තර්ගත තෙවන පාර්ශවීය වෙබ් අඩවි සඳහා සබැඳි සාමාන්ය වෙළඳපොළ විවරණයක් ලෙස "පවතින පරිදි" සපයා ඇති අතර එහි ආයෝජන උපදෙස් ඇතුළත් නොවේ. ඕනෑම අන්තර්ගතයක් ආයෝජන පර්යේෂණයක් ලෙස අර්ථ දක්වා ඇති ප්රමාණයට, ආයෝජන පර්යේෂණයේ ස්වාධීනත්වය ප්රවර්ධනය කිරීමට නිර්මාණය කර ඇති නෛතික අවශ්යතාවලට අනුකූලව අන්තර්ගතය සකසා නොමැති බවත් එලෙස අරමුණු කර නොමැති බවත් ඔබ සලකා පිළිගත යුතු අතර එබැවින් එය අදාළ නීති සහ රෙගුලාසි යටතේ අලෙවිකරණ සන්නිවේදනයක් ලෙස සලකනු ලැබේ. ඉහත සඳහන් තොරතුරු සලකා මෙතනින් ප්රවේශ විය හැකි, ස්වාධීන නොවන ආයෝජන පර්යේෂණ සහ අවදානම් අනතුරු ඇඟවීම පිළිබඳ අපගේ දැනුම්දීම ඔබ කියවා තේරුම් ගෙන ඇති බව සහතික කර ගන්න.
