Short work at one of Cognac’s ‘Big Three’.
France’s cognac industry is buckling under the double whammy of tariffs and other trade measures placed on it by China and the US.
The industry employs 72,500 people across France. Much of this is in the Charente region in the South-West of France, and heavily dependent on exports: Le Figaro estimates 98% of the sales of Rémy Martin – one of the ‘Big Three’ producers alongside Hennessy and Martell – are exports, representing 3.35 billion Euros.
Problems for Rémy Martin began in mid-November with tit-for-tat trade measures between China and the EU. Beijing introduced temporary measures for European brandy imports (“mainly cognac”, comments Le Figaro) requiring an amount to be lodged with Chinese customs for each shipment, in response to EU measures against subsidised EVs from China.
Things got much worse earlier this month when Donald Trump slapped a 20% tariff on all European goods. (The US represents 38% of Rémy Martin’s exports; China takes 25%). This was the final nail in the coffin (or perhaps the oak barrel) for CEO Éric Vallat, who stepped down on 10 April after five years in office.
Two thirds of the 390 workers at Rémy Martin’s Merpins bottling plant outside the town of Cognac have now been put on ‘partial unemployment’: losing one week of employment a month for a 7% pay cut. Trade unionist David Charrier, who has been with the company for three decades, notes: “I have known complicated years when there have been crises, but we’ve never had crises affecting both our largest markets”.
Paris has obtained a three-month delay of additional Chinese custom duties. But how long is it before other companies are forced to follow Rémy Martin’s decision?
Original article was written in French and published in Le Figaro (originally from AFP) on 16 April 2025. It’s available here.
Le Figaro is a French daily newspaper founded in 1826.
Summary by ML.
