Cognac producers in France, who are losing millions of euros, are begging for negotiations with China

Cognac producers are asking the French government to start negotiations with China to resolve bilateral trade tensions, due to which the sector is losing 50 million euros per month. This is reported by Bloomberg.

EADaily reminds that currently China is the world's largest cognac market by value.

In November 2024, the European Commission announced that it had initiated a lawsuit at the World Trade Organization (WTO) against China's introduction of anti-dumping measures against cognac imported from the EU bloc.

In October, the French Ministry of Commerce said it was working with EU executive authorities to challenge China's decision, made after the European Commission announced the introduction of additional duties on imports of electric vehicles from China, which caused the largest conflict with Beijing in the last decade.

France, whose producers include LVMH, Remy Cointreau and PernodRicard, exports huge volumes of alcoholic beverages to Asia and is seen as the main target of additional customs duties on cognac after Paris expressed support for EU efforts to protect the domestic market of electric vehicles.

Since October 11, importers have been required to provide customs authorities with what the Ministry of Commerce called a "proper guarantee" when importing the main brands of cognac produced in the EU. The cost of guarantees ranges from 34.8% to 39% of the total import price. Preliminary data show that the sale of imported cognac from the European Union at below-cost prices threatens "significant damage" to the Chinese cognac sector, according to the Ministry of Commerce in Beijing.

According to the National Interprofessional Cognac Bureau of France (BNIC), products are currently excluded from the duty-free distribution list in China, which, together with taxes imposed by Beijing, has led to a 50% drop in monthly shipments to this Asian country.

"We solemnly ask the French government to fulfill its obligations: As soon as possible, start negotiations with China on lifting all restrictions affecting our industry. Every month we lose more than 50 million euros, which leads to an economic and social catastrophe, which is already significant," said the organization's president Florent Morillon.

In early January 2025, President Emmanuel Macron announced that Prime Minister Francois Bayrou would travel to China to discuss the trade dispute.

"While the date of the visit has not been set, negotiations have not been started and have not even been prepared," BNIC said in a statement.

According to the organization, in 2023, cognac producers exported 32 million bottles to China, and this Asian country became the second largest market for French cognac after the United States.