Cognac Makers Eye Deal Amid EU-China Trade Tensions

In a move to secure their position in the Chinese market, France's cognac manufacturers have reached a tentative agreement on minimum import prices, according to insiders familiar with the matter. This deal, however, can only be finalized if progress is made on a separate trade dispute involving EU tariffs on Chinese-made electric vehicles.

Sales of cognac, a highly valued spirit in China, have been heavily impacted by China's anti-dumping measures against European brandy, which are linked to broader trade tensions between the EU and Beijing. Cognac makers have been caught in this geopolitical struggle, facing plummeting sales and hefty duties up to 39%.

With a looming deadline, industry sources are optimistic, though cautious, about reaching a formal agreement by July 5th, which could bring much-needed relief to major producers like Pernod Ricard, Remy Cointreau, and LVMH. China and the EU continue negotiations, with an upcoming summit in Beijing potentially influencing the outcome.

(With inputs from agencies.)