“We appeal to our government so that the necessary steps are finally taken to put an end to this escalation to which we are hostage and whose outcome is today more threatening than ever. These taxes must be suspended before it is too late,” complains the National Interprofessional Bureau of French Cognac (BNIC).
The taxes in question? The Chinese Ministry of Commerce announced on Tuesday that importers of European brandies will have to post a deposit with customs from next Friday. However, China represents 25% of cognac exports.
For the BNIC, supported by the Federation of Wine and Spirits Exporters: “The French authorities cannot abandon us and leave us alone in the face of Chinese retaliation which does not concern us. The effect of these taxes would be catastrophic for our sectors and our regions.” According to him, “it is obvious that this is a direct and immediate response from the Chinese authorities to the decisions taken by Europe.”
The Commission refers the matter to the WTO
As a reminder, at the end of last week, members of the European Union decided to impose up to 35% additional customs duties on imports of Chinese electric cars.
This Tuesday, the European Commission announced that it would challenge Chinese measures against cognac imports before the World Trade Organization (WTO). “We consider these measures to be unfounded and we are determined to defend European industry against the abusive use of trade defense instruments,” says a spokesperson, Olof Gill. “We are not worried,” tempers the European Commissioner for the Economy, Paolo Gentiloni.
On the Paris Stock Exchange, shares of cognac heavyweights suffered: Rémy Cointreau closed down 6.37% to 61.75 euros, and Pernod Ricard lost 4.18% to 125.95 euros. The Commission plans to come to the aid of producers. In a statement, it said it would “carefully identify and evaluate all possibilities to offer appropriate support to EU producers facing the negative effects of this unjustified decision by the Chinese government.”
