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BEIJING/LONDON (Reuters) -China launched an anti-subsidy investigation into dairy imports from the European Union a day after the bloc's revised tariff plan for China-made electric vehicles.
Wednesday's inquiry, targeting cheese, milk and cream meant for human consumption, came after the EU amended proposed punitive duties on Chinese EV imports to 36.3% from an initial 37.6%. Beijing had urged Brussels to abandon the tariffs.
DAIRY PRODUCER ARLA FOODS:
The CEO of Arla Foods, one of the world's biggest dairy producers owned by more than 9,000 dairy farmers in Denmark, Sweden, Britain, Germany, Belgium, Luxemburg and the Netherlands, said the company is not directly impacted by China's anti-subsidy probe.
"I'm confident that the EU and the system can handle this, and that it doesn't necessarily have to become as dramatic as it initially seems," Peder Tuborgh said.
"(China is) far from self-sufficient, and the exports to China are still reasonable, but they are able to meet their growth consumption nicely through the development they are undergoing themselves... (I see this) as a normal market mechanism, more than being a specifically protectionist thing.
EUROPEAN UNION CHAMBER OF COMMERCE IN CHINA:
"Regrettably, the use of trade defence instruments by one government is increasingly being responded to seemingly in kind by the recipient government.
"The chamber will be monitoring the investigation and hopes it will be conducted fairly and transparently. We expect our affected member companies to co-operate to the fullest with the investigation."
FRIESLANDCAMPINA:
Dutch dairy cooperative FrieslandCampina, whose specialised nutrition business sells infant nutrition products in China and which has a small business selling condensed milk products and creamers for the business-to-business market, said it was aware of the announcement of the anti-subsidy investigation.
"Naturally, we will provide the necessary information related to the investigation, if requested, in accordance with laws and regulations," a spokesperson said.
THE IRISH FARMERS ASSOCIATION:
Tadhg Buckley, director of policy and chief economist at Ireland's largest farming lobby group the Irish Farmers' Association, said Chinese authorities are looking predominantly at "cheese, cream and other related processed cheese, blue cheeses and cheeses of that type".
He said that would account for about 45 million of 430 million euros ($478.55 million) worth of Irish exports last year. Specialised powders used for nutritional purposes make up the bulk of exports to China, he added.
"If the investigation... expanded outside into powders, it would certainly be a much different and much more significant issue for Ireland," he said, adding that a trade delegation was heading to China at the end of the month.
IRISH MINISTRY FOR AGRICULTURE, FOOD AND THE MARINE:
"I will be engaging with the EU Commission to ensure that it has all of the data necessary in so far as Ireland is concerned to resolve any issues raised in the proposed investigation," Charlie McConalogue, Ireland's Minister of Agriculture, Food and the Marine, said.
JACOB GUNTER, LEAD ECONOMY ANALYST AT MERCATOR INSTITUTE FOR CHINA STUDIES:
"EU dairy exports to China come out to around 1.7 billion euros, which is less than 1% of total EU exports to China, so even if tariffs go so high as to de facto block all dairy trade, it will have a relatively small impact on EU exports.
"Nevertheless, the pain will be felt more acutely in the biggest exporters to China, from Irish butter to Finnish milk powder to Spanish Manchego to Italian Parmigiano Reggiano.
"China has been ramping up its own dairy production for years, and only a small portion of all dairy products consumed in China are imported.
"China is important for butter and cheese exports, but considering the size of the country, it is still a minor player.
"I expect that more ‘replaceable’ dairy products will be most affected by tariff hikes, as alternatives from the U.S., Canada, Australia, and New Zealand will be more cost competitive – think butter, milk, milk powder, cream, and the most common types of cheese.
"For less ‘replaceable’ product types – many of Europe’s high-end and specialized cheeses, for example – the main question will be at (what) point a given product just becomes cost prohibitive."
($1 = 0.8986 euros)
(Reporting by Liz Lee, Joe Cash, Richa Naidu, Padraic Halpin and Isabelle Yr Carlsson said; Editing by David Holmes, Kirsten Donovan, Michael Perry and Jan Harvey)
