Hennessy suspends plan to bottle cognac in China, say workers

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Reuters

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November 26, 2024

French cognac maker Hennessy has suspended a plan to bottle its brandy in China to keep away from import tariffs, workers briefed by administration mentioned on Tuesday, after tons of of employees went on strike final week to protest the transfer.

Reuters

Hennessy, owned by luxurious group LVMH, had mentioned it was exploring choices to take care of antidumping measures imposed by Beijing final month, together with delivery cognac to China for bottling to avoid tariffs.

The corporate informed unions and worker representatives on Monday it had dropped the plan after a gathering final week between the French and Chinese language presidents in Brazil allowed talks on the difficulty to renew, mentioned Mathieu Devers, a Hennessy technician and worker consultant.

Hennessy didn’t reply to requests for touch upon the plan’s suspension.

“We are satisfied with the suspension even if unfortunately it remains only a suspension,” mentioned Devers, noting that the plan may resume if political negotiations fail to make progress.

China is the second-largest export marketplace for cognac after america and the business’s most worthwhile territory, accounting for $1.7 billion in exports final 12 months.

Beijing has required deposits of 30% to 40% to be paid on imports of EU brandy since final month, hitting primarily French cognac producers like Hennessy, Pernod Ricard and Remy Cointreau.

French President Emmanuel Macron urged Chinese language counterpart Xi Jinping to drop the tariffs on the G20 assembly in Brazil, and mentioned Prime Minister Michel Barnier would proceed talks on the difficulty throughout a China journey early subsequent 12 months.

Frederic Merceron, consultant with the Drive Ouvriere union which was briefed on the plans, cited administration as saying at a gathering on Tuesday that Hennessy desires to strengthen its core markets and broaden in areas the place it isn’t but current to offset the tariff impression.

The EU Fee mentioned on Monday it had formally introduced the provisional anti-dumping measures imposed by China on imports of EU brandy to the World Commerce Group.