French cognac producers push for deal on China dumping probe

Cognac makers hit with allegations of dumping French brandy in China called for a deal to end the dispute ahead of President Xi Jinping’s state visit to France.

The summit on May 6 offers a “unique opportunity for an agreement,” the Bureau National Interprofessionnel du Cognac, an industry association, said in a statement Thursday. 

China’s Ministry of Commerce started an anti-dumping investigation into liquor products like distilled grape brandy, known as Cognac, from the European Union earlier this year. The move came after the EU opened a probe last fall into China’s electric vehicle subsidies.

The group said the French government supports the industry with “a view to suspending this unjustified investigation.” The association said there have been high-level contacts between French and Chinese authorities in recent weeks.

The investigation could lead to additional customs duties on cognac exported to China, which accounts for nearly a quarter of the sector’s total exports. The Cognac industry represents about 70,000 direct and indirect jobs in France and generated some €3.35 billion ($3.58 billion) worth of exports last year, BNIC said.

Pernod Ricard SA and LVMH Moet Hennessy Louis Vuitton SE respectively own the Cognac brands Martell and Hennessy.

Bernard Arnault, LVMH’s chief executive officer, told reporters after the company’s annual general meeting last month that he hopes the visit of Xi will help smooth trade relations between Paris and Beijing. In January, LVMH said it was working with the country on the Cognac probe. 

Pernod has also said it is cooperating with the China investigation.