Volkswacht Bodensee - Cognac on the rocks: industry seeks French govt help from Chinese tariffs

Since October 11, European exports of brandy to China have been hit with duties after the EU imposed tariffs of up to 35.3 percent on Chinese electric vehicles over claims of unfair competition.

The measure has been painful for French cognac makers who rely on exports for 98 percent of their sales with cognac making up the vast majority of EU brandy exports to China.

"These punitive measures have already caused a 50 percent drop in our monthly shipments," the association of cognac and armagnac producers said in a statement.

"We're starting to see an impact on jobs," said Florent Morillon of the BNIC association of cognac producers and traders.

"We have an industry that functions very well, that supports more than 70,000 jobs and today it is weighed down by European political decisions," he added.

The statement comes ahead of the opening Saturday of France's annual agricultural fair in Paris, a key event for politicians and the industry to meet.

The BNIC called on French Prime Minister Francois Bayrou to travel to China to attempt to resolve the dispute.

"It's an entirely political issue and it can only be resolved politically," it added.

An executive of one cognac producer said they had been received by French government leaders but "we have the impression of being sacrificed".

The executive said there was no possibility of replacing the lost business in China, the top market in terms of value and second in terms of volume behind the United States.

With the return to the White House of Donald Trump, who carried out an aggressive trade policy in his first term that included a stiff 25 percent tariff on cognac, the industry faces additional uncertainty.

"We hope we'll be spared on that side," BNIC's Morillon said.

T.Zimmermann--VB