Home Awareness Subject of tensions between France and China: the Cognac industry awaits a diplomatic solution

Subject of tensions between France and China: the Cognac industry awaits a diplomatic solution

Since January, cognac has been targeted, like all wine spirits imported from the European Union, by an investigation by Chinese authorities into an alleged competition violation.

Chinese President Xi Jinping is expected in France on Monday May 6 and Tuesday May 7 to celebrate 60 years of diplomatic relations during a state visit. “This question will be addressed during discussions in order to ensure that French interests are preserved during and at the end of the procedure launched by the Chinese authorities,” declared the Élysée.

Cognac, the “thermometer” of diplomacy
Launched after a complaint from Chinese alcohol professionals, this procedure against cognac is also considered by observers as a measure of retaliation to a European investigation, largely supported by France, into subsidies for electric cars produced in China.

For Jean-Marc Figuet, professor at the Bordeaux School of Economics and specialist in the wine market, Beijing acted “as a fine strategist” by “targeting” cognac, “a largely surplus sector in French agriculture in crisis, which affects a region very precise.”

ALSO READ. Emmanuel Macron in China: renewing the economic link that has been strained for four years

With a quarter of its bottles shipped to China, its main market after the United States, this sector that is ultra-dependent on exports (98% of sales) now fears an increase in customs duties, like the one suffered by Australian wines in recent years, indicates its inter-professional association.

“We are a bit like the thermometer of bilateral relations with China and we have the feeling of being totally taken hostage” in the current trade tensions, believes Raphaël Delpech, director general of the National Interprofessional Cognac Bureau (BNIC).

ALSO READ. At the heart of the Verallia factory in Cognac: how glass is reborn at 1,500 degrees

Decline in exports
The cognac industry, which says it represents 72,500 jobs in France and 3.35 billion euros in exports, is banking on this meeting with Emmanuel Macron to “result in the suspension” of this “anti-dumping” investigation.

While it is still “too early” to measure the impact of the procedure since January, the industry fears seeing its commercial positions “crumble” in China, after a year 2023 in decline worldwide.

Last year, exports fell to 165.3 million bottles compared to 212.5 million in 2022, a performance which was already down 4.8% compared to 2021.

But “without a diplomatic solution between France and China”, and with the possible return to power in the United States of Donald Trump, who had already threatened to target French wines in the past, “the context could become more complicated” the future, warns Jean-Marc Figuet.

This article is originally published on .lanouvellerepublique.fr

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