CITIC Securities: EU Countervailing Ruling Implemented to Benefit Domestic Substitution of Dairy Products

The Zhitong Finance App learned that CITIC Securities released a research report stating that on December 22, 2025, the results of the EU dairy countervailing investigation ruling were announced. China collected a “countervailing duty guarantee” on six types of dairy products imported from the EU (cheese+whipped cream), with an ad valorem ratio of 28.6%-42.7%. The import volume of dairy products related to countervailing duty guarantees in January-October was close to 250,000 tons, which is beneficial to the short-term increase in domestic demand. Local enterprises are expected to seize the window to promote domestic substitution in the supply chain, and are optimistic about the acceleration of domestic substitution of cheese and cream.

CITIC Securities's main views are as follows:

The results of the EU dairy countervailing investigation ruling were announced. China levied a “countervailing duty guarantee” on six types of imported dairy products from the EU, with an ad valorem ratio of 28.6% to 42.7%

On December 22, 2025, the Ministry of Commerce announced the preliminary ruling on the countervailing investigation of dairy products imported from the EU. Starting December 23, 2025, when importing products, EU importers are required to pay corresponding temporary “countervailing duty guarantees” to China Customs based on the “ad valorem subsidy rate” of each company calculated by us. The relevant security deposit rate is basically between 28.6% and -42.7%. The countervailing investigation began on August 21, 2024, and mainly targeted six types of imported dairy products related to cheese and cream. Among them, the subsidy investigation period was 2023M4-2024M3, and the industrial damage investigation period was 2020M1-2024M3. On August 18, 2025, the Ministry of Commerce announced that the investigation would be extended for 6 months until February 21, 2026.

The import volume of dairy products related to countervailing duty guarantees in January-October was nearly 250,000 tons, which is beneficial to domestic demand in the short term

According to the General Administration of Customs, from January to October 2025, China imported a total of 3.45 million tons of dairy products from the European Union (converted to raw milk, same below), of which 246,000 tons were imported in categories related to countervailing investigations, and 18.3/63,000 tons of cheese/cream respectively, accounting for 25%/2% of imported dairy products from China. The bank expects that the collection of countervailing duty security deposits will directly benefit the increase in demand for local dairy products in the short term.

Countervailing duty guarantees will push up the prices of imported products from the EU in the short term, and domestic replacement of cheese and cream will accelerate

Previously, the EU was China's most favored country for trade, and the import tariff rate for deep-processed dairy products was between 8%-15%, and domestic cheese/whipped cream products were 20%-40%/35%-45% lower than the price of imported products from abroad. The countervailing guarantees imposed this time will help increase the price gap between domestic and foreign products in the short term and accelerate the domestic substitution process for cheese and cream products. Against the backdrop of rising prices of imported goods from the EU, the bank expects domestic cheese to seize the window and enter the domestic B-side supply chain. On the one hand, the domestic whipped cream will be replaced at an accelerated pace. On the other hand, it is expected to further open up the domestic whipped cream price band, and profits are also expected to be more reasonable (previously suppressed by imported products, the price range for domestic products was generally 300-400 yuan/box).

risk factors

Consumer sentiment declined; food and beverage recovery fell short of expectations; price increases fell short of expectations; industry competition intensified; the impact of emerging channels exceeded expectations; raw material prices continued to rise; food safety issues.