Hennessy, a subsidiary of LVMH , the leading French luxury brand , is currently studying how to ship brandy to China for bottling in order to cope with the high tariffs imposed by Beijing. China is the second largest exporter of cognac outside the United States and the country with the largest sales volume of cognac, with exports reaching US$1.7 billion last year. However, China's economic situation has been severe in recent years, and the prosperity of the past has faded, and sales of Hennessy Cognac have fallen sharply. Coupled with Beijing's implementation of anti-dumping measures (Anti-Dumping Measures) last month, which imposed a tariff of more than 30% on bottled brandy imported from the EU, Hennessy's already collapsing performance will undoubtedly be worsened.
In October, Beijing imposed a tariff of more than 30% on bottled brandy imported from the EU. In addition to Hennessy, other French brands such as Remy Cointreau and Pernod Ricard also had a serious impact.
Michael Lablanche, regional representative of the CGT union, said that the news that Hennessy was preparing to move to China for bottling triggered about 500 workers at the bottling plant in the Cognac region to stop work in protest on Tuesday and prepare to continue the strike. Shipping cognac in containers and bottling it in China would allow companies to avoid tariffs, but would pose livelihood challenges for workers.
Hennessy executives are preparing to ship 1,000 liters of VSOP cognac samples to China on December 15 to test the stability of the product. If the test is successful, Hennessy will move the entire VSOP "bottling line" to China, preparing to handle 600,000 boxes of brandy, which is the estimated sales volume in China in 2025.
Fellow Cognac brand Remy Cointreau said it would raise the price of Chinese Cognac to help mitigate the impact of tariffs imposed by Beijing and would cut costs in manufacturing and advertising spending. A company spokesman said Rémy Martin has no plans to move its bottling lines to other countries.
In the past, in addition to drinking brandy to experience life, the exquisite outer bottle and carton packaging are the perfect representation of French artistic design. Although the raw materials still come from the country of origin, it is thought that even the fine wine that the French are proud of can be sold for the sake of gross profit. After being shipped to China for packaging, I suddenly felt that emphasizing authentic local production and manufacturing was no longer a "craftsman spirit", but an outdated "business method."
VSOP is a mid-level cognac aged for four years and sells for about US$60. It is a "little blessing" that the average middle class can afford. Next year, this still affordable entertainment expenditure may also be enjoyed with As tariffs increase and prices rise, wine lovers can stock up on goods before the end of the year.
LVMH’s stock price has fallen by 24.61% this year. When the most luxurious brands also implement bottle festivals, the impact on general consumer products will only be greater. Next year, the high tariffs and sanctions imposed on Beijing after Trump takes office will also trigger China's anti-dumping policy against the United States.
The chain effect caused by the anti-dumping policy will have a "butterfly effect" on the global economy next year. France's luxury goods industry is ready, and the United States will also impose high tariffs on the European Union after Trump officially takes office. The prices of consumer goods will certainly It will continue to surge around the world, which will not only affect the lowest level of workers, but also affect advertising, marketing and other peripheral manufacturers. The long-term impact of anti-dumping policies may lead to rising global prices and economic instability.
