Following suggestions by French President Emmanuel Macron about a possible softening of Chinese President Xi Jinping’s approach towards the import of cognac to the Celestial Kingdom, share prices of French producers of this drink are rising. Increases were observed, among others, in companies such as Pernod Ricard and Rémy Cointreau.
During his meeting on Monday with Xi Jinping, Macron expressed his hope that French products would remain available in the Chinese market. He thanked Xi for his “open stance” regarding China’s anti-dumping investigation into French Cognac. French President Emmanuel Macron even presented the Chinese leader with a bottle of the exclusive drink.
Xi Jinping and Emmanuel MacronSarah Messonnier/PAP/EPA
Anti-dumping investigation
In early 2024, China launched an anti-dumping investigation into brandy imported from the European Union in containers smaller than 200 litres. There are no EU brandy bottling plants in China and the drink is delivered in original glass bottles.
According to Chinese Customs, from January to November 2023, China imported $1.57 billion worth of distilled grape wine beverages. 99.8 percent of them came from France.
Sudden decline and recovery
After the investigation was announced, as Reuters reported, shares of the companies producing French brandy and cognac, Pernod Ricard and Remy Cointreau – the latter fell by 11%. As much as 50 percent of cognac produced by Pernod Ricard reaches Chinese tables.
But after Macron’s suggestions, the share prices of the most important producers of this drink rebounded clearly. Shares of the largest French cognac producers, Pernod Ricard and Remy Cointreau, rose 2.7 percent, respectively. and 7.6 percent after 1 p.m. on Tuesday.
Neither Pernod Ricard nor Remy Cointreau responded to CNBC’s request for comment.
Xi Jinping met with Emmanuel MacronLudovic Marin/PAP/EPA
Revenge of electric cars
The aim of Beijing’s decision to impose a tariff tax was to retaliate against the European Union’s investigation into subsidies to Chinese electric vehicle manufacturers. France was among the supporters of the tax.
It is estimated that China exported vehicles worth US$12.7 billion to the European Union in 2023.
Main image source: PAP/EPA/Andre Payne
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