China’s European brandy import probe could dampen enthusiasm for once-coveted liquor, ‘far-reaching impact’ on alcohol market
- China’s Ministry of Commerce launched an anti-dumping investigation into brandy imports from the European Union earlier this month
- China has been a major export market for French cognac, but there is an increasing trend for Chinese consumers to buy domestic brands
For the past few decades, French cognac symbolised wealth, power and refinement for China’s business elite.
But the liquor’s prospects as the go-to luxury item for China’s growing middle class have taken a turn following China’s anti-dumping investigation into brandy imports from the European Union (EU), as well as changing consumer preferences.
On January 5, China’s Ministry of Commerce launched an anti-dumping investigation following a request from the China Alcoholic Drinks Association, who said the prices of the imported products had been reduced by an estimated 15.88 per cent.
The move will mainly affect French cognac, which makes up most of China’s brandy imports, casting a shadow over the already tense trade relations between Beijing and Brussels.
Industry insiders are concerned that this investigation could escalate to other European red wine brands
“When China announces an investigation, it is the start of the ban on French cognac, an effective ban. It signals to society in China that cognac is no longer in favour,” said Ian Ford, the Shanghai-based founder and chief executive of Nimbility, a brand and sales management company for alcohol sold in Asia.
“Therefore, if you’re at a big banquet, entertaining a government official, it’s taboo now to be drinking or gifting cognac.”