Frustrated cognac producers in southwestern France are increasingly worried about the looming threat of Chinese tariffs on European alcohol. Industry representatives fear that this step by Beijing could force French manufacturers to leave the Chinese market.
About 800 protesters, with tractors and placards, gathered this week in the southwestern French city of Cognac to demand a delay in an upcoming European Union vote on tariffs on Chinese electric cars.
The protest - the first since 1998 - comes after Beijing did not rule out imposing tariffs following an anti-dumping investigation on alcohol imported from the European Union.
The probe began months after the EU launched an investigation into Chinese subsidies for electric vehicles.
And with the EU set to vote next week on imposing tariffs on Chinese cars, French cognac producers are worried about the implications this vote could have on their livelihoods.
"The situation is critical," said Anthony Brun, head of the cognac producers' union. The decision to impose tariffs on Chinese electric cars "will also threaten our entire industry," he added.
A downward spiral
The interprofessional association of cognac producers BNIC has been notified that China intends to impose tariffs of around 35% on European brandy, a move seen as an attack, particularly against France.
"For a year now, we have been warning the French and European authorities about this risk and the need to stop this downward spiral," Brun wrote in a letter addressed to new French Prime Minister Michel Barnier about the threat of tariffs.
"We are victims without being responsible in any way... We have not been listened to," Brun said, writing on behalf of the Union of Cognac Producers.
In May, French President Emmanuel Macron thanked his Chinese counterpart for not imposing tariffs on French cognac amid the probe by presenting Xi Jinping with bottles of the expensive drink.
But cooperation with Chinese authorities has produced "no results" despite spending millions, said Florent Morillon, head of BNIC.
Tariffs could force French brandy to "disappear from the Chinese market", which accounts for a quarter of exports, Morillon added.
No way out
The threat of losing the Chinese market could prove existential for some brandy makers who rely on foreign consumers for up to 60% of their profits.
According to a report by research group Daxue Consulting, in 2022 China imported more brandy than any other alcohol, with most of it coming from France.
Cognac producers are calling on the EU to delay its September 25 vote on tariffs on electric cars imported from China, fearing Beijing will retaliate with tariffs on European alcohol.
"We have no way out," said Rodolphe Texier, a member of the farmers' union in western France's Charente region.
"If Europe doesn't follow us, we're dead," said Texier, who fears industry-wide repercussions that could affect everyone from distillers to barrel makers to truckers.
With more than 4,400 holdings and around 85,000 jobs, the French cognac industry is already in trouble after seeing its sales fall by 22% in 2023. The new areas for planting vineyards are also drastically reduced.
French cognac producers are not the only ones under pressure, as in August Beijing launched an inspection of EU subsidiaries for some dairy products.
Although a "principle" meeting has been set between the BNIC and the Prime Minister's office, Florent Morillon feels he is being "hostage" to Paris and Brussels.
"The French and European authorities have decided to sacrifice us," wrote union leader Anthony Brun.
"Our jobs do not matter, nor our weight in the local economy, our contribution to trade and to the image of France," he added. | BGNES
