French Cognac Exports Plummet Amidst Chinese Measures

The French cognac industry is grappling with a significant downturn in exports to China, as the impact of Chinese anti-dumping measures continues to weigh on the sector. According to data released by the Bureau National Interprofessionnel du Cognac (BNIC), cognac sales to China dropped by 24 percent in value in 2024, marking a substantial decline in the market's importance for French cognac producers.

The Chinese measures, implemented in October 2024, have had a "very significant impact" on cognac exports to China, with the number of bottles sold to China falling by 9.6 percent in 2024, representing a loss of 23.8 percent in value. This decline can be attributed to the increased costs and barriers to entry created by the deposit guarantee requirement, as well as the threat of permanent duties on cognac exports to China.

The BNIC has expressed concern about the imminent imposition of definitive duties on cognac exports to China, which could have far more severe consequences for the cognac industry and the regions it supports. The preservation of the balance in the cognac sector depends on maintaining access to the Chinese market, which is the largest consumer market for cognac by value. The exclusion from this key market would affect 70,000 direct and indirect jobs, 270 cognac houses, and 4,400 winegrowers.

To mitigate the effects of the Chinese measures and diversify their export markets, French cognac producers have implemented several strategies. These include expanding into other markets, particularly in North America and Africa, diversifying their product portfolio, embracing sustainable practices, leveraging digital marketing and e-commerce, strengthening brand visibility, investing in production capabilities, and engaging in diplomatic efforts to negotiate with Chinese authorities and lift the measures on cognac exports.

The French government and industry representatives have engaged in diplomatic efforts to negotiate with Chinese authorities and lift the measures on cognac exports. This includes the visit of Madame Sophie Primas, Minister Delegate for Foreign Trade, to China during the Shanghai CIIE. The exchanges in the coming days will be crucial, as the preservation of the balance in the cognac sectors and regions depends on maintaining access to the Chinese market.

In conclusion, the French cognac industry is facing significant challenges due to the Chinese anti-dumping measures. While producers have implemented various strategies to mitigate the impact and diversify their export markets, the future of the industry remains uncertain. The French government and industry representatives are engaged in diplomatic efforts to negotiate with Chinese authorities and lift the measures on cognac exports, but the outcome remains to be seen. The cognac industry's ability to adapt and innovate will be crucial in determining its long-term success in the face of these challenges.