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Cognac and European Spirits Held Hostage by China

Aymeric Mantoux

By Aymeric Mantoux08 février 2024

Due to ongoing trade disputes surrounding European electric vehicle imports, Beijing has launched a sweeping offensive against the spirits of the Old Continent, which is its primary market.

European wine brandy producers are alarmed by the possibility of a prolonged investigation by China's Ministry of Commerce, fearing they could become collateral victims of a wider trade conflict (Camus)

Attempting to solicit reactions from major Cognac producers about the emerging trade crisis between Brussels and China has become a near-impossible mission. Responses such as "No comment" or "Please contact the BNIC (Bureau Interprofessionnel de l’Industrie du Cognac)" are the replies from those involved in this burning issue.

In response to European Union investigations into Chinese subsidies, Beijing launches a dumping investigation into European wine spirits (DR)

They are indeed in a tough spot, witnessing their thriving businesses disrupted in China since the country initiated an anti-dumping investigation in early January 2024. China claims that European spirits are being sold at lower prices in China than elsewhere. "It's just an excuse," comments an anonymous public affairs representative from one of the leading Cognac houses. "Everyone knows it, but no one will tell you anything; the topic is far too sensitive. But for now, the entire market is frozen." This is hardly surprising, as China stands as one of the top markets for European spirits, "the leading market in terms of value," according to BNIC, with figures reaching 3.6 billion euros, constituting 75% of alcohol production in France!

In recent years, the growth of the Chinese economy has led to a substantial increase in shipments of wine spirits to China and Singapore, both in volume and value. How did we get here?

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