NEWS
FRENCH COGNAC TRADE SAID DEAL IS IMMINENT AFTER PROPOSING MINIMUM PRICES TO CHINA
By Siulan Law Mathews DipWSET
16-6-2025
Source: Unsplash
The Reuters news agency reported that French Cognac producers have suggested minimum prices for exports to China of between USD20 and around USD300 per litre in order to resolve the tariffs stand-off with China.
The price list seen by Reuters included a "minimum import price" for different bands of Cognac defined by how long the spirit has been aged, ranging from two years for the cheapest "Very Special" (VS) Cognacs to the most expensive "Extra Extra Old" (XXO), aged 14 years or more.
Under the offer, VS Cognac would have a minimum import price of RMB144.70 (USD20.16) per litre, while "Very Superior Old Pale" (VSOP), aged for at least four years, would be priced at a minimum of RMB177.92.
High-end "Extra Old" (XO) would cost RMB526.52 to import, with the XXO category costing at least RMB2,126.07 (USD296.16) per litre.
These minimum prices would represent an additional cost of around 12 to 16 percent for the arrival of our products on the Chinese market.
The minimum prices are part of efforts to avoid permanent tariffs of up to 39 percent amid tense negotiations with China's commerce ministry, which has opened an anti-dumping investigation focused on the sector.
The prices in the document refer to the price paid for Cognac by importers in China, with distributors, wholesalers, retailers and consumers paying more to buy it.
The Cognac trade body Bureau National Interprofessionnel du Cognac was very optimistic last Thursday about a positive outcome and said: “Agreements could be signed in the coming hours and we will be able to communicate once the agreement is finalised.”
Gabriel Picard, chairman of the Fédération des Exportateurs de Vins & Spiritueux de France was quoted by French daily Sud Ouest as having confirmed that a “minimum price commitment” was “being discussed between France and China”.
“So, technically, we’re in agreement,” he reportedly said during a presentation of a report on France’s spirits industry. “This minimum price commitment would represent an additional cost of around 12 to 16 percent for the arrival of our products on the Chinese market.”
Despite strong objection from member states including Germany and Hungary, the EU voted to impose extra tariffs ranging from 7.8 percent for Tesla to 35.3 percent for SAIC and other Chinese EV producers last October.
In retaliation, China started to levy importers of European brandies security deposits ranging from 30.6 to 39.0 percent of the import value from 11 October, as interim measures before investigations conclude on 4 April which was later extended to 5 July.
French Cognac makers have been severely affected, exports to China slumped by 23.8 percent by value and 9.6 percent by volume last year as Beijing’s anti-dumping measures on European brandies take its toll.
Globally, French Cognac exports dropped by 10.6 percent in value compared to 2023. The fall was driven by a 24.2 percent decrease in the value of exports to the Far East region, which is mainly represented by China.
(the writer can be contacted at: info@thewinechronicle.com)
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