Fears of US tariff hike prompt increased exports of Cognac

Wednesday December 11 2019 by Vitisphere

“For the moment, Cognac has managed to escape the measures that have hit our colleagues in the wine industry”, commented Patrice Pinet on December 5 in Cognac.“For the moment, Cognac has managed to escape the measures that have hit our colleagues in the wine industry”, commented Patrice Pinet on December 5 in Cognac. - Photo credit : Alexandre Abellan

Since last summer, multiple threats of retaliation from US President Donald Trump have led to a rise in Cognac shipments to the United States, with volumes in excess of consumption needs in the French brandy’s leading market. “Demand is increasing due to the switch in consumption from white to brown spirits. But shipments are higher in anticipation of tariff threats, to secure supplies to the market. The United States normally represent 45% of our shipments, now they account for 50%”, commented Patrice Pinet, chairman of the Cognac trade organisation, on December 4 during a VS Pack trade show conference at Espace 3000 in Cognac.

A reminder of the recent precautionary shipments to the United Kingdom ahead of Brexit, these additional exports will inevitably be followed by a readjustment, either due to overstocking or additional tariffs. Although only bottled still wines under 14% ABV are affected by the Airbus subsidies issue, and the latest threats have targeted sparkling wines following new taxation on the digital behemoths (GAFA), the Cognac industry has taken a fatalistic view: “We have no guarantee that we will escape tariffs forever”, sighed Patrice Pinet, who “asks the[French] government to take into account the specificities of high value shipments of wines and spirits so as not to [allow] products that have nothing to do with the trade dispute to be held hostage”.

 

 

 

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