Shares in Rémy Cointreau and Pernod Ricard rose this morning (7 May) as Emmanuel Macron signalled a possible resolution to the threat of Chinese tariffs on EU-produced wine-based spirits.

Following a meeting between Macron and Xi Jinping at the Elysée Palace, Macron told reporters he thanked Xi for his “openness regarding the provisional measures on French Cognac and his wish not to see them applied”.

In January, China opened an anti-dumping investigation into allegations of EU dumping of wine-based spirits into its market. The probe was launched in response to complaints by the China Liquor Industry Association, China’s ministry of commerce said.

The brandy investigation, due to be completed within one year, will look into allegations of dumping between 1 October, 2022 and 30 September, 2023, including EU-origin brandy imported in containers of less than 200 litres.

Cognac trade advocacy group, The Bureau National Interprofessionnel du Cognac, said it has taken “note of the statements” and that “we have yet to analyse their real scope and are awaiting confirmation that Cognac producers will not be subject to additional taxes on the Chinese market either immediately or in the coming months.”

The group previously said Cognac exports to China accounted for 25% of the sector’s total market.

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Chinese tariffs on French Cognac and brandy could have a major impact on French distillers and the markets responded this morning to their possible avoidance. Shares in Rémy Cointreau were up by 7.6% at 12pm GMT today (7 May), while Pernod Ricard’s saw a 2.6% boost.  

French brandy giant Rémy Cointreau saw Asia take 55% of its Cognac sales in its first-half results for 2023-24, noting “outstanding performance” in Taiwan and “solid growth” in China overall. The Rémy Martin brand owner saw a 16.6% rise in overall organic sales year on year in H1, led by China.

China made similar anti-dumping allegations against Australia in 2020, leading to huge disruption in the country’s wine industry..

China imposed temporary tariffs of between 107% and 212% on Australian wine in November 2020, accusing it of dumping cheap barley and wine into its market in 2020. Exports to mainland China dropped to almost zero in December.

China lifted its tariffs on Australian wine in March following a review.

Macron’s gifts to the visiting Chinese leader reportedly include several bottles of French Cognac.