Chinese restrictions on EU brandy come into force

The River Charente glides smoothly through the old town center. Willows wisp in the waters and ducks gabble in the reeds. The town of Cognac may seem quiet - but there is a storm brewing.

China's tougher restrictions on imports of brandy from the European Union have come into effect. Cognac is in line to suffer an economic blow, as its famous producers - from big houses to boutique bottlers - have to put down larger security deposits to ensure continuity of exports to China.

The move comes after Brussels voted to apply additional tariffs to China-based electric vehicles makers. The new measures from Beijing almost exclusively apply to France as it accounts for 99 percent of China's imports of the wine-based spirits.

China argues the dumping of EU brandy in its market "substantially damages" domestic producers. But France's General Union of Cognac Winemakers says China's measures are unjust.

In a statement the union said: "The French authorities cannot sacrifice us, abandon us and leave us alone, hostages. France must find common ground so that the application of taxes is suspended or even canceled. We expect concrete and rapid answers."

French brandy shipments to China reached $1.7 billion last year. France is seen as the primary target of Beijing's measures due to Paris pursuing European duties on Chinese electric vehicles. Cognac is one of France's top luxury drinks but more than 90 percent of it is exported. Despite that, brandy producers say they will adapt to the restrictions.

Here in the home of Cognac, producers argue they've been caught up in a wider disagreement that does not directly concern their product. 

The autumn sun shines on the endless rows of vines ranging out across the south-western French countryside. But clouds are on the horizon, with diplomatic worries that this EU-China dispute over EVs and brandy could spill over.

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