Cognac winegrowers stand firm against price cuts and contract breaches

nity among Cognac winegrowers is yielding results, according to the AOC Cognac winegrowers’ organisation UGVC, which emphasised the need for continued solidarity within the industry. At a well-attended public meeting on July 9 in Gensac-la-Pallue (Charente), the organisation urged members to maintain a united front in the face of mounting pressures, welcoming positive developments in Cognac’s two main markets. The conclusion of China’s anti-dumping enquiry on July 5 has led to a minimum price being introduced which enables 96% of the region’s brandies to avoid the steep 32.2% tax initially slated. Meanwhile, a review of US customs tariffs, originally scheduled for July 9, has been postponed by President Trump until August 1. Ongoing negotiations between Washington and Brussels are reportedly progressing, with hopes of a reciprocal ‘0 for 0’ tariff agreement on wines and spirits. These promising geopolitical developments may put an end to months of market disruption and economic anxiety for the entire Cognac industry – winegrowers, trading companies and suppliers. Still, the UGVC has put down some “red lines”: the breakthroughs should mark a new collaborative phase. In layman’s terms, this means that Charentes wine producers “will not tolerate the breach of contracts” by negociants, are opposed to a “possible drop in the prices of wines and brandies”, and “call for Europe to provide compensation to fund permanent vine pulls”.

“We fought side by side with the trade to avoid becoming collateral damage in a dispute that has nothing to do with us. Now the situation is improving, we do not expect to be let down. That is not the way you build a collaborative group”, explained Anthony Brun, chairman of the UGVC. Brun said that he regretted the drop in contracted volumes which negociants have already notified winegrowers of through contract amendments within the scope agreed by both sides: “This only increases the pressure on growers”. Brun is also concerned about other practices that do not comply with the scope of the contracts. Although there have allegedly been few outright breaches of contract, there is apparently “a fairly high number of cases where volumes have been renegotiated beyond permissible limits in contract clauses (on the latest vintage and older age classifications)”, said a critical Brun who pointed out that the UGVC has always been proud of the high level of contractualisation for Cognac, bordering on 90% of volumes.