Published by Global Banking and Finance Review
Posted on June 12, 2025
By Tassilo Hummel and Emma Rumney
PARIS/LONDON (Reuters) -Negotiators representing French cognac producers suggested minimum prices for exports to China of between $20 and around $300 per litre as an opening bid in talks aimed at ending a tariff stand-off with China, a document seen by Reuters shows.
The minimum prices are part of efforts to avoid permanent tariffs of up to 39% amid tense negotiations with China's commerce ministry, which has opened an anti-dumping investigation focused on the sector. They were sent to producers several weeks ago for their approval by a Paris-based law firm negotiating on the spirit makers' behalf.
A spokesperson for the law firm, GIDE, declined to comment.
The industry, grappling with falling sales and simultaneous tariff threats from the United States, its other key market, has been fighting to secure a deal with China since Beijing first threatened to levy the duties in January 2024. The move came amid a wider trade dispute with the European Union after it imposed tariffs on imports of Chinese electric vehicles.
A flurry of political meetings in Paris and technical discussions in Beijing last week raised hopes that a settlement of the trade spat was imminent. But the talks ended with no deal, leaving just weeks to go before a July 5 deadline for Beijing to wrap up its anti-dumping probe.
Chinese authorities subsequently announced that the industry had made a voluntary "price pledge" and it was reviewing its terms.
The price list seen by Reuters included a "minimum import price" for different bands of cognac defined by how long the spirit has been aged, ranging from two years for the cheapest "Very Special" (VS) cognacs to the most expensive "Extra Extra Old" (XXO), aged 14 years or more.
Under the offer, VS cognac would have a minimum import price of 144.70 yuan ($20.16) per litre, while "Very Superior Old Pale" (VSOP), aged for at least four years, would be priced at 177.92 yuan.
High-end "Extra Old" (XO) would cost 526.52 yuan to import, with the XXO category, where prices reach thousands of dollars per bottle and more, costing at least 2,126.07 yuan ($296.16) per litre.
France's BNIC industry body declined to comment on the prices, citing confidential negotiations. "We keep waiting and hoping for a good outcome," a BNIC spokesperson said.
The prices in the document refer to the price paid for cognac by importers in China, with distributors, wholesalers, retailers and consumers paying more to buy it.
Reuters was not able to determine current import prices across the sector, led by LVMH's Hennessy, Pernod Ricard's Martell and Remy Cointreau's Remy Martin.
Hennessy's VS cognac currently sells to consumers for around $100 per litre on Tmall. Remy Martin's cheapest label meanwhile fetches around $110 to $350 for its XO cognac.
TALKS ONGOING
Chinese authorities have already imposed steep provisional duties on imports of European brandy - mostly made up of French cognac - in the dispute with the EU.
Laurence Whyatt, analyst at Barclays, said it wasn't clear the industry had made a major concession in the price offer seen by Reuters.
"Import prices are usually a third to a half of the retail price, so the prices detailed appear commensurate to the existing import prices," he said.
However, the document seen by Reuters reflected the sector's opening offer and talks are ongoing. A source familiar with the discussions said after weeks of back and forth, the two sides seem potentially close to agreement, but another person said the talks were tough and the sector was being pushed to make a bad deal.
A settlement with China, the most important export country by value for France's $3 billion cognac industry, that removes the duties would be a boon for the sector, whose growth prospects have been hurt by the tariff dispute.
($1 = 7.1788 Chinese yuan renminbi)
(Reporting by Tassilo Hummel in Paris and Emma Rumney in London. Additional reporting by Laurie Chen in Beijing and Casey Hall in Shanghai; Editing by Emelia Sithole-Matarise)
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