NEWS
HENNESSY WORKERS ON OPEN-END STRIKE TO PROTEST COMPANY'S CHINA BOTTLING PLAN
By Tony Zhu
21-11-2024
Credit: Siulan Law Mathews
Some 600 employees of French Cognac maker Hennessy, part of the LVMH group, went on strike on Tuesday to protest an experimental plan to export the drink in vats and then bottle locally in China to circumvent Beijing’s EU brandy tariffs.
The strike at the Hennessy plant in the town of Cognac, which employs 1,100 people, is open-ended, though an anonymous source close to Hennessy told French news agency AFP that "dialogue is possible."
Hennessy union representative Frederic Merceron said the management had informed them of their plan to test on exporting the product in vats with a view to future bottling in China by a service provider.
"We can well imagine the impact on employment," Merceron told AFP while describing the news as a "cold shower".
It is believed that Hennessy will carry out the first test delivery by the end of 2024 to ascertain that the quality of the drink is maintained after transport.
During this test operation, all materials including glassware, labels, corks and boxes will be shipped to China with the drink then bottled there.
The union representing all Cognac workers has expressed worries that other Cognac producers will follow suit.
China has required importers of EU brandies to submit an average 35 percent security deposit since 11 October, in retaliation to EU’s decision to slap extra tariffs on Chinese electric vehicles.
The requirement was later relaxed to allow the deposit imposed on Cognac and Armagnac importers to be replaced by a less complex bank guarantee.
The security deposit does not apply to bulk shipments of brandy, thus allowing producers to circumvent it by shipping bulk and bottle locally.
Rémy Cointreau, another leading Cognac producer, has told Reuters news agency that they are not planning to ship bulk. While Pernod Ricard, owner of the Martell brand, has not yet made known their position.
(the writer can be contacted at: info@thewinechronicle.com)
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