The staff of the Hennessy cognac house in France staged an unprecedented strike against the background of China’s introduction of customs duties on brandy from the EU, Sud Ouest reports.
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“From 500 to 600 people (half of the company’s 1,100-person workforce) went on strike against management’s decision to export cognac in barrels to avoid paying customs duties,” the media said.
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The strike is taking place in the Charente department of the New Aquitaine region in western France. At the company’s main office, protesters set up a barbecue and stretched out banners with union logos. The General Confederation of Labor (CGT) and Force of the Workers (FO) unions said they do not intend to stop the action and are also calling for a large demonstration of industry professionals next week.
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It is expected that this measure will avoid the 35% tax that will have to be paid when importing cognac into China already in bottles. Previously, the company said it planned to find a contractor in China to bottle the drink. The measure will be tested now to see how it will affect the quality of cognac.
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Employees fear this will lead to massive layoffs.
At the same time, the company noted that they are not considering the possibility of moving production from the Cognac department, but they intend to “take all measures to protect their interests.”
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In early October, the Ministry of Commerce of the People’s Republic of China announced the introduction of temporary anti-dumping measures against cognac and brandy imported from the European Union. The department noted that the decision was made based on the results of an anti-dumping investigation, which the Ministry of Commerce initiated on January 5, 2024 in response to requests from Chinese companies.
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The National Interprofessional Bureau of Cognac Producers of France has appealed to the country’s leadership with a demand to take measures to reach an agreement with the PRC on the abolition of duties on their products.
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Producers believe that the effect of duties will be catastrophic for the entire sector and the economy of the regions where the alcoholic beverage is produced. According to their information, China accounts for 25% of all French cognac exports.
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In October, thousands of cognac producers protested in the French region of the same name against Chinese customs duties on their products in response to the introduction of customs duties on Chinese electric cars by the European Union.
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The European Commission announced on October 4 that EU countries approved the duties on electric vehicles from China previously proposed by the EC: depending on the manufacturer, the fees will amount to up to 36.3%. At the same time, Brussels and Beijing will continue to search for an alternative option until the end of October.
