Hennessy employees on strike against bulk export project to China

Around 500 to 600 employees of the Hennessy cognac house, a subsidiary of LVMH, went on strike on Tuesday in Charente against a possible bulk export project to China, supposed to circumvent Beijing's customs surcharges, we learned from unions. According to the CGT and FO, Hennessy plans to experiment with exporting its cognac in vats in order to avoid surcharges estimated at 35% on bottles sold in China, the second market for this spirit, which is ultra-dependent on exports. “Management told us they wanted to do tests on bulk with a view to future bottling in China carried out by a service provider” and no longer in France, Frédéric Merceron, FO representative at Hennessy, told AFP, confirming information from La Tribune. “We can well imagine the repercussions in terms of employment”he added, speaking of “cold shower”.

“This is a first for a big house . It’s a real finger in the gear”underlined Matthieu Devers, CGT delegate, for whom “the other houses will follow“. The strike movement on the Cognac site (1,100 employees on permanent contracts) is renewable, specify the unions. “Social dialogue continues”a source close to Hennessy told AFP. A first export test, by the end of 2024, must measure whether the product remains “qualitative” after transport, according to Matthieu Devers.

Explore all avenues to stay on the Chinese market

“To reassure us, the presentation to the CSE was to say: “we will send the dry materials of Cognac”, that is to say the glassware, the labels, the corks, the boxes”he specifies, judging “aberrant» sending large quantities of supplies. Since October 11, China has required importers of European brandies (wine-based spirits), of which cognac represents 95% of the total, to deposit a deposit or a letter of bank guarantee with Chinese customs, in as part of an anti-dumping investigation.

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The latter is widely seen as a retaliatory measure for the EU's imposition of customs surcharges on electric cars imported from China. In a press release sent to AFP, the cognac inter-professional association says it does not want “comment on individual company strategies”. “However, it should be noted that while waiting for a negotiated solution, and faced with the deterioration observed, certain Houses could be forced to explore all avenues which would allow them to maintain the presence of the appellation on the market Chinese”underlines the National Interprofessional Cognac Bureau (BNIC).