China has launched an anti-dumping investigation on brandy imported from the European Union, a step that appears to be mainly targeted at France.
Below are some facts about China's brandy imports and European companies exposed to the market.
China Brandy Market
China imported $1.57 billion (€1.43 billion) worth of spirits from distilled grape wine in 2023 through November. France accounts for 99.8% of all EU brandy exports, according to Chinese customs data.
In 2022, brandy made up the largest portion of imported spirits in China at 37.5 million litres, according to a Daxue Consulting report.
China counts a dozen local producers of brandy, most of them small-scale. The biggest domestic producer is Yantai Changyu Pioneer Wine Co Ltd that makes Koya brandy.
Remy Cointreau
The French spirits maker, which produces Remy Martin cognac, derived 30% of its group sales, or €464.6 million euros, from China in fiscal year 2022/2023.
Pernod Ricard
China accounted for about 10%, or €1.21 billion, of Pernod Ricard's group sales in 2022/2023. Cognac brands like Martell make the bulk of Pernod's sales in the country, and it also sells whisky.
Diageo
China accounted for 3%, or £513.4 million ( €596 million), of Diageo's sales in 2023. Jefferies analysts said the maker of Johnnie Walker whisky has no direct exposure to China cognac, but they estimated an indirect exposure at 2-3% of net income through its stake in a joint venture with luxury giant LVMH.
Campari
Last month, the Italian spirits group agreed to buy French cognac brand Courvoisier, aimed at expanding its footprint in China, which represents about 9% of Courvoisier's revenues. The deal is expected to close this year.
