Beijing has extended an olive branch to French cognac producers by promising a “significant” tax refund if they cooperate with its anti-dumping investigation into European Union brandy sold in China, according to an industry source with knowledge of the matter.
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Major brands Hennessy, Martell and Rémy Martin have been offered the terms, said the person, who spoke anonymously due to the sensitivity of the issue.
To qualify, producers must agree to Beijing’s demands, commit to a minimum selling price and refrain from dumping practices, the person said, adding that negotiations were ongoing but the refunded amount should be “pretty significant”.
Last October, Beijing imposed temporary anti-dumping duties on brandy and cognac imported from the EU in retaliation for the bloc’s tariffs on made-in-China electric vehicles.
The investigation into European cognac, mainly produced in France, will conclude on July 5. If no agreement is reached by then, the temporary tariffs of up to 39 per cent could become permanent.
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The Bureau National Interprofessionnel du Cognac (BNIC) – France’s leading representative for the cognac industry – said both sides had negotiated a preliminary agreement to establish a minimum import price, pending approval from Chinese authorities.