how the Cognac sector risks losing its way!

Will China’s retaliation against the European Union’s new customs duties on the importation of Chinese electric vehicles into the Old Continent have a serious impact on the cognac industry?

China’s response to new customs duties on Chinese electric vehicles imported into the EU (up to an additional 36%) which have just been ratified by the 27, could have serious consequences for different sectors of the economy. French activities which abundantly export their products to the Middle Kingdom. Among which the Cognac sector (a strong alcohol to be drunk in the greatest moderation), whose sales in China reached 3.6 billion euros in 2022, or around 25% of its exports! In other words, an essential market for this French industry, extremely dependent on China.

China, a vital market!

In retaliation, Beijing would therefore seriously consider a 35% surcharge on French brandies entering its territory (Armagnac, or even Sherry brandy are also affected), a measure which would then be particularly damaging for the sector, which was confirmed in recent days in the newspaper The Parisianthe president of the General Union of Winegrowers for the AOC Cognac Anthony Lebrun:

“The Chinese market is vital for us. Such a surcharge would clearly put us out of the game (…) We are talking about a product that we have been marketing for export for 250 years and there, in five minutes, they destroyed this outlet.”

It remains to be seen whether this anti-dumping measure from China will be applied. Which, in such a case could have disastrous effects for the Cognac sector. To the point of drinking the Chalice down to the dregs?