already in difficulty, cognac producers pushed down by the rise in prices towards China

Already in difficulty by the economic context and by a poor harvest in progress, cognac producers will have to face a sharp increase in the price of their bottles in China.

France and the European Commission want to challenge Chinese surcharges on cognac and Armagnac, announced Trade Minister Sophie Primas on Tuesday, October 8. Beijing decided to take these measures in retaliation for European taxation of Chinese electric vehicles.
For French producers, it is a disaster because China represents 25% of exports.
And the measure will apply from Friday.

In three days, importers of these strong alcohols, produced from wine in Europe, will have to pay a deposit of 35% on the value of the label in China. An entry-level cognac, sold for 50 euros per bottle, will therefore increase to 70 euros.

This is a deposit and a surcharge, in other words it will be returned if a diplomatic solution is found. After several weeks of threats, Beijing only half implemented them but the industry considers itself hostage to a subject that does not concern it, and to decisions that weigh heavily since 97% of cognac is consumed abroad .

“This is how we are thanked when we contribute largely to the excess of the French trade balance abroad. We are really angry”

Mathieu Augier, winegrower

at franceinfo

“We feel completely sacrificed by the State. We have never asked anyone for anything, we operate in our little corner, without public aid,” adds Mathieu Augier, based in Mainxe, in Charente, between Jarnac and Segonzac. He also resents the contradictions of the French government. In Brussels, France voted for the taxation of Chinese electric vehicles, even if it today denounces these measures.

The cognac appellation is by far the most important of what we call “European brandies”. It represents 15,000 direct jobs, 70,000 indirect, but today, it is experiencing a context that is not favorable. Matthieu Augier sees this on his large farm, covering around fifty hectares.

“Covid, the war in Ukraine, the purchasing power crisis have already affected our sales. They are down by more than 10 or 15%. If we add this tax again, it will be complicated,” explains Mathieu Augier. The winegrower speaks of a dark year because, in addition, production is expected to be down this year. “A lot of rain, illness, a little hail… In the end, in the middle of the harvest, we realize that the yield is very low compared to usual. Down around 20% but it can go up much more in certain sectors.” This is why the national inter-professional cognac office is calling on France to take steps to put an end to this escalation with China, which would weaken a sector already in difficulty.