Producers of cognac in southwestern France are rising more and more anxious over bearing the brunt of the looming menace of Chinese tariffs on European brandy, a transfer trade representatives fear may power French liquor from the Chinese market.
Some 800 protestors using on tractors and carrying indicators gathered in France’s southwestern city of Cognac this week demanding a delay to an upcoming European Union vote to impose duties on Chinese electrical autos (EVs).
This protest – the primary since 1998 – comes after Beijing refused to rule out future tariffs following an anti-dumping investigation into brandy imported from the European Union.
The probe was launched months after the EU investigated Chinese electrical car subsidies.
And with the EU set to vote subsequent week on introducing tariffs on Chinese EVs, France’s brandy makers are fearful in regards to the penalties that vote may have on their livelihood.
“The situation is urgent,” mentioned Anthony Brun, the union head for Cognac’s brandy makers, including {that a} determination to levy tariffs on Chinese EVs “will jeopardize the entire industry.”
‘Downward spiral’
Cognac’s interprofessional affiliation BNIC mentioned it was just lately notified that China intends to impose tariffs of round 35% on European brandy, a transfer seen as concentrating on France.
This comes regardless of repeated assurances from Beijing it will not implement provisional tariffs after it discovered European brandy had been dumped into China, threatening the nation’s home trade with “substantial damage.”
“For a year now, we have been warning French and European authorities about this risk and the need to stop this downward spiral,” wrote Brun in a letter addressed to new French Prime Minister Michel Barnier in regards to the tariff menace.
“We are the victims without being in any way responsible … We have not been listened to,” mentioned Brun, writing on behalf of the cognac union.
In May, French President Emmanuel Macron thanked his Chinese counterpart for not imposing customs duties on French cognac amid the probe, presenting Xi Jinping with bottles of the costly drink.
But cooperating with Chinese authorities has produced “no results” and incurred thousands and thousands in prices, mentioned Florent Morillon, head of BNIC.
Tariffs may power French brandy to “disappear from the Chinese market,” which accounts for 1 / 4 of exports, added Morillon.
‘No means out’
The menace of dropping the Chinese market may very well be existential for some brandy makers, who rely on abroad customers for as much as 60% of their earnings.
China imported extra brandy than another spirit in 2022, with most of it coming from France, in accordance with a report by analysis group Daxue Consulting.
Cognac producers are calling on the EU to postpone its Sept. 25 vote on imposing tariffs on EVs imported from China, fearing China will reply with customs duties on European brandy.
“We have no way out,” mentioned Rodolphe Texier, a member of a farmers’ union in France’s western Charente area.
“If Europe doesn’t follow us, we’re dead,” mentioned Texier, including he’s involved about widespread repercussions all through the trade which may influence everybody from distillers to barrel makers to truck drivers.
With greater than 4,400 farms and a few 85,000 jobs, France’s cognac trade is already in hassle after it noticed a 22% drop in gross sales in 2023 and dramatically lowered new vine planting zones.
France’s brandy makers are usually not the one ones underneath strain, as Beijing launched a probe into EU subsidiaries on some dairy merchandise in August.
Even although a gathering is ready “in principle” between BNIC and the prime minister’s workplace, Florent Morillon instructed Agence France-Presse (AFP) there’s a feeling of being “taken hostage” by Paris and Brussels.
“The French and European authorities have decided to sacrifice us,” wrote union head Anthony Brun.
“Never mind our jobs, our weight in the local economy, our contribution to trade, and to France’s image,” he added.
Source: www.dailysabah.com