*

China imposes security deposits on brandy imports from EU

*

Move follows EU vote for tariffs on Chinese-made EVs

*

Shares in French brandy makers fall after Chinese move

*

Temporary security deposits effective from Oct. 11

(Adds comments from Chinese commerce ministry on EU pork probe,

EU cars in paragraphs 3-4, adds graphic)

BEIJING/PARIS, Oct 8 (Reuters) - China imposed temporary

anti-dumping measures on brandy imports from the European Union

on Tuesday, hitting brands from Hennessy to Remy Martin, after

the 27-state bloc voted for tariffs on Chinese-made electric

vehicles (EVs).

An investigation has preliminarily determined that dumping

of brandy from the EU is threatening China's own brandy sector

with "substantial damage", the Chinese commerce ministry said.

Hinting at more to come potentially, the Chinese ministry

said its anti-dumping and anti-subsidy investigation into EU

pork products was ongoing and would make "objective and fair"

decisions at the end of the probe.

The ministry added that it was considering a hike in tariffs

on imports of large-engine vehicles. Higher levies would hit

Germany's producers the hardest, with German exports of vehicles

with engines of 2.5 litres or larger to China reaching $1.2

billion last year.

As of Oct. 11, importers of brandy originating in the EU

will have to put down security deposits mostly ranging from

34.8% to 39.0% of the import value, the ministry said.

France was seen as the target of Beijing's brandy probe due

to its support of tariffs on China-made EVs. It also accounted

for 99% of China's brandy imports last year, with French brandy

shipments reaching $1.7 billion.

Hennessy and Remy Martin were among the brands worst-hit,

with importers having to pay security deposits of 39.0% and

38.1%, respectively.

The deposits would make it more costly upfront to import

brandy from the EU. It was not immediately clear how and when

importers would be able to get back their deposits. The Chinese

commerce ministry gave no details.

SHARES TUMBLE

Shares in Pernod Ricard were down 2.9% at 0714 GMT

following the news, while Remy Cointreau was down 5%

and LVMH, owner of Hennessy, was down 4%

Companies that cooperated in the Chinese investigation were

hit with security deposit rates of 34.8%. The rate on Martell

was the lowest, at 30.6%.

French cognac trade body the Bureau National

Interprofessionnel du Cognac (BNIC), Pernod Ricard and Remy

Cointreau did not immediately respond to a request for comment.

The punitive measures came on the heels of a vote by the EU

to adopt tariffs on China-made EVs by the end of October. Ahead

of the vote in late August, China had suspended its planned

anti-dumping measures on EU brandy, in an apparent goodwill

gesture, despite determining that EU brandy had been sold in

China at below-market prices.

At the time, the commerce ministry said its probe would end

before Jan. 5, 2025, but that it could be extended.

China's commerce ministry previously said it had found that

European distillers had been selling brandy in its 1.4

billion-strong consumer market at a dumping margin in the range

of 30.6% to 39% and that its domestic industry had been damaged.

In the EU's decision to impose tariffs on China-made EVs,

the bloc set tariff rates ranging from 7.8% for Tesla to 35.3%

for SAIC and other producers deemed not to have cooperated with

the EU's anti-subsidy investigation. These will come on top of

the EU's standard 10% car import duty.

The European Commission has said it is willing to continue

negotiating an alternative, even after tariffs are imposed.