Charente Winegrowers Mobilize Against Chinese Tax Threats
In a significant show of unity, nearly 1,200 Charente winegrowers and industry representatives marched through Cognac on Tuesday, voicing their concerns over potential new taxes imposed by China on cognac spirits. This marks the first mobilization since 1998, driven by fears that a proposed 34.8% tax could devastate the already struggling cognac sector, which has seen a 30% drop in exports to the United States since 2022. The march, organized by the General Union of Winegrowers for the AOC Cognac (UGVC), was designed as a 'first warning shot' to the government, as the winegrowers demand a meeting with Prime Minister Michel Barnier.
The Impact of Trade Tensions on Cognac Exports
The cognac industry is currently caught in the crossfire of escalating trade tensions between China and the European Union. Beijing's investigation into European wine-based spirits is a direct response to EU inquiries regarding Chinese subsidies for electric vehicles. The potential imposition of customs duties on cognac could result in a significant loss of market share, as China accounts for a quarter of cognac exports. Anthony Brun, president of the UGVC, emphasized the urgency of the situation, stating that if taxes are implemented, the cognac industry could be forced to 'disappear from the Chinese market.'
Future of Cognac Industry at Stake
With 4,400 farms and 15,000 direct jobs reliant on the cognac appellation, the stakes are high. The industry has already faced a 22% drop in sales volume in 2023, prompting fears of layoffs across the sector. Florent Morillon, president of the National Interprofessional Cognac Bureau, expressed that the cognac producers feel they are being 'held hostage' in a trade war that jeopardizes their livelihoods. The winegrowers are determined to make their plight a priority for the new government, urging immediate action to safeguard the future of cognac production.
