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Time of India
20-05-2025
- Business
- Time of India
France's cognac producers weather climate change, tariffs
Vines for as far as the eye can see. Some 24 hectares (59 acres) belong to Alain Reboul, a 62-year-old, seventh-generation winemaker. His Earl du Bois Noble winery is one of the smaller ones in the region of France and is located around 100 kilometers (about 62 miles) north of the city of Bordeaux. Tired of too many ads? go ad free now Wine production is strictly regulated in the region, which is the biggest white wine region in France and home to at least 4,350 winemakers. Only grapes from the six areas, or crus, of the Cognac geographical indication can be used to make the brandy that is produced in the region and bears the same name. The largest market for cognac is the United States, whose President Donald Trump recently threatened to impose 200% tariffs on European spirits. The second-largest market is China, where President already imposed temporary anti-dumping measures on imports of brandy in the fall of 2024 in retaliation to the European Union's approval of duties on electric vehicles made in China. The alcohol can no longer be sold in Chinese duty-free stores. According to the French trade association, the Bureau National Interprofessionnel du Cognac (BNIC), exports to China have decreased by half, resulting in a loss of over €50 million (about $56 million) per month. The BNIC has appealed to the French government not to forget the approximately 70,000 jobs that depend directly and indirectly on cognac. 'Plant, plant, plant!' Along with a local winegrowers' union, the BNIC has recommended to winemakers that they get rid of some of their vines in order to save costs for machinery, fertilizers and pesticides. That's out of the question for Reboul, who has spent a large part of his career buying more land and planting more vines. "You have to plant them for 30 years, at least," said the tall, weather-beaten man. "For generations!" Shorter-term thinking has not paid off for his family in the past, Reboul said, adding that his father switched to red wine during the oil crisis and that it wasn't worth it. Just a few years ago, he said, the motto was "Plant, plant, plant!" The thirst for cognac seemed unquenchable. Tired of too many ads? go ad free now Despite the COVID-19 pandemic and the war in Ukraine, almost 213 million bottles were sold in 2022, a record year, according to the BNIC. Reboul said the current slump has been the greatest shock since the oil crisis. He has colleagues who have uprooted several hectares of vines, replacing them with olive trees or truffle plantations, but he said he will not do the same. "My philosophy won't change," he said, adding that there have always been crises. A part from Chinese and US duties, the Cognac region has also been affected by the loss of the important Russian market in the wake of the full-scale invasion of Ukraine. Climate change is also putting a strain on winemakers because grapes are becoming sweeter; for good cognac, they need a certain acidity. The grapes are also ripening earlier, increasing the risk of a harvest failure because of hail, frost or disease. Family-run businesses carry on tradition Reboul sells his entire yield to Hennessy, one of the oldest and best-known cognac producers. He manages his estate with the help of relatives and seasonal workers, and said he loves his job. Cassandre Allary runs her family business, the , with her brother. They have 26 employees and produce oak barrels and casks of all sizes for both wine and spirits. There are some 50 barrelmakers located between the cities of Cognac and Bordeaux, and their craft is recognized as part of the country's winemaking traditions. It takes a lot of knowledge and craft to make a barrel, Allary said. The wood, which is always oak, is first dried outdoors for many months so that the wind and rain bring out the tannins. Then the barrels are toasted and fitted with heads and hoops before being polished and deburred, or smoothed out. "The temperature [for toasting the wood] depends on the aromas that we want to tease out of the wood," she said. "We do this according to the client's wishes." Allary explained that if the wood is toasted at low heat, it releases coconut aromas, whereas a medium heat reveals notes of vanilla, mocha or cocoa. Regarding the current business climate, she said the small company, which used to supply only cognac distillers but diversified its portfolio in the 1990s, is running at full capacity this year, but orders are dwindling. Cognac houses founded by immigrants Almost all the 20,000 inhabitants in Cognac produce or market wine, cognac, barrels, glasses, bottles or labels. The brandy has enriched the region and particularly the town, which gives it its name. Cognac owes its global success largely to trade. The fact that it is distilled made it possible to export it to other countries. Several famous cognac houses, many of which now belong to larger corporations, were founded by immigrants, including Bache-Gabrielsen, Hennessy and . The the latter two, along with Courvoisier and , dominate about 90% of the market. Tapping into new markets A gallery of portraits hangs above drawers full of historic bottle labels in the lobby of the Maison Bache-Gabrielsen, which was founded in 1905 and is still owned by the family. The company produces around 1 million bottles a year, which is not much compared to more famous brands, but a lot considering there are only 23 employees. The wine is supplied by winegrowers like Reboul and is then turned into a high-proof "eau de vie" through double distillation. The brandy must then mature for at least two years in oak barrels so that it can absorb aromas from the wood. The different wines are then blended to produce the amber-colored end product. Jean-Philippe Bergier is the cellar master, blender and "nose" of Bache-Gabrielsen. He has worked there for 35 years, blending up to 15 distillates from all of the region's areas. He said certain grape varieties, which bring more acidity and once were only added in small proportions to a blend, are now in demand because of climate change. He said he has seen a number of trends come and go. Recently, Bache-Gabrielsen bottled a small batch of organic cognac in recycled bottles to test a new market segment. The company also wants to tap into new markets by producing cocktails, liqueurs and aperitifs. He said there is a lot of interest from young people about how cognac is made. Though they drink less alcohol than older generations, they are more interested in quality. And that's why he believes firmly in the future of cognac.
Express Tribune
05-04-2025
- Business
- Express Tribune
US tariffs trigger market rout, China says ‘market has spoken' in rebuke
Listen to article Global financial markets lost $5 trillion in value this week after US President Donald Trump imposed sweeping new tariffs on Chinese goods, drawing retaliation from Beijing and rattling economies worldwide. On Friday, Trump raised levies on Chinese imports by 34%, bringing total US tariffs on Chinese goods to 54% this year. The move also ended a duty-free allowance for low-value imports from China and introduced a new 10% 'baseline' tariff on all global imports, with higher rates set to follow next week. China responded immediately with equivalent tariffs and export controls on key materials, including rare earths. Chinese foreign ministry spokesperson Guo Jiakun wrote on Facebook, 'The market has spoken,' sharing an image of plummeting US markets and calling for 'equal-footed consultation.' The fallout was swift. The S&P 500 dropped 9% over the week, marking its worst decline since the pandemic, while oil and commodity prices tumbled and investors flocked to government bonds for safety. US Customs began collecting the new 10% tariffs from midnight Saturday, with no grace period for new cargo, although shipments already en route by sea or air have until May 27 to arrive tariff-free. Higher 'reciprocal' tariffs of up to 50% will take effect next week, hitting EU imports with 20% duties and Chinese goods with 34%. Vietnam, also affected, has agreed to trade talks. Canada and Mexico were excluded from the latest round due to ongoing levies related to US fentanyl policy, while over 1,000 categories—mainly in energy, pharmaceuticals, and semiconductors—were exempted. 'This is the single biggest trade action of our lifetime,' said Kelly Ann Shaw, a former White House trade adviser. 'It's a seismic shift in how we trade with the world.' Industries warn of inflation, job losses Chinese trade bodies across sectors warned of knock-on effects for both countries, with the chemicals and metals industry predicting increased US inflation and recession risk. France's cognac industry, which exports $1.1 billion annually to the US, is already seeing economic fallout. Following new 20% tariffs imposed by Washington, producers like Jean Fillioux are uprooting vineyards and searching for new markets. 'Problems are part of a vintner's life,' said Christophe Fillioux, whose family has produced cognac for over 130 years. 'But the visibility now is near zero.' Trump has threatened to raise wine and spirits tariffs to 200% if Europe responds with new duties on US bourbon. Global slowdown adds pressure Trade tensions come as the cognac sector faces declining global demand after years of expansion. Growers who invested heavily post-COVID now face mounting debts. 'We're managing this with the banks,' said Florent Morillon of the Bureau National Interprofessionnel du Cognac. 'External shocks are forcing a complete rethink.' As Washington and Beijing dig in, economists warn the tariff war could strain global growth and push vulnerable industries over the edge. China, meanwhile, is calling on the US to return to dialogue and abandon what it called 'wrong actions.'
Yahoo
06-02-2025
- Business
- Yahoo
French cognac exports slump in 2024 as Chinese measures weigh, data shows
By Alban Kacher (Reuters) - The value of French cognac exports to China fell by nearly a quarter last year as the Chinese economy struggled and Beijing imposed anti-dumping measures on European brandy exports, according to data shared by an industry lobby group on Wednesday. French cognac makers' global exports dropped by 10.6% in value from 2023, data from the Bureau National Interprofessionnel du Cognac (BNIC) shows. The fall was driven by a 24.2% decrease in the value of exports to the Far East region, mainly represented by China, the largest market for cognac by value, which dropped 23.8% year-on-year, and 9.6% by volume. BNIC attributed the fall to a difficult Chinese economic recovery and the effect of anti-dumping measures. "The sharp fall in our shipments to China since last October makes a rapid political solution to the problem of Chinese taxes more necessary than ever," it said. The body said it now expects a period of greater stability for the French government and planned bilateral negotiations with Beijing "must now get underway". French President Emmanuel Macron said in early January that Prime Minister Francois Bayrou will travel to China to try to discuss the trade dispute. ($1 = 0.9599 euros) Sign in to access your portfolio
Reuters
05-02-2025
- Business
- Reuters
French cognac exports slump in 2024 as Chinese measures weigh, data shows
Feb 5 (Reuters) - The value of French cognac exports to China fell by nearly a quarter last year as the Chinese economy struggled and Beijing imposed anti-dumping measures on European brandy exports, according to data shared by an industry lobby group on Wednesday. French cognac makers' global exports dropped by 10.6% in value from 2023, data from the Bureau National Interprofessionnel du Cognac (BNIC) shows. The fall was driven by a 24.2% decrease in the value of exports to the Far East region, mainly represented by China, the largest market for cognac by value, which dropped 23.8% year-on-year, and 9.6% by volume. BNIC attributed the fall to a difficult Chinese economic recovery and the effect of anti-dumping measures. "The sharp fall in our shipments to China since last October makes a rapid political solution to the problem of Chinese taxes more necessary than ever," it said. The body said it now expects a period of greater stability for the French government and planned bilateral negotiations with Beijing "must now get underway". French President Emmanuel Macron said in early January that Prime Minister Francois Bayrou will travel to China to try to discuss the trade dispute. ($1 = 0.9599 euros)
Local France
05-02-2025
- Business
- Local France
French cognac exports to China slump as tariffs bite
Brussels angered the Chinese government last year by imposing tariffs of up to 35.3 percent on Chinese electric vehicles over unfair competition claims. In response, Beijing set what it called 'temporary' tariffs on brandy last October, hitting France's cognac makers in particular, who rely on exports for 98 percent of their sales. 'The Chinese taxes imposed since October 11 have already had a very significant impact on our exports to China', trade body the Bureau National Interprofessionnel du Cognac said. It said the number of bottles sold to China fell by 9.6 percent last year, representing a loss of 23.8 percent in value. Overall cognac exports fell 10.6 percent by value to around €3billion, 'in a global geopolitical and economic context affecting the entire liquor sector'. Exports to the North American market fell 1.5 percent by value, as European nations brace for the threat of new tariffs by US President Donald Trump, who over the weekend confirmed tariffs against Chinese, Canadian and Mexican imports – though he later delayed them for Canada and Mexico. During his first term in office, Trump in 2019 imposed 25 percent tariffs on a range of European food products, including French wine.
