French cognac makers offer China minimum import prices to fend off tariffs
The minimum prices are part of efforts to avoid permanent tariffs of up to 39 per cent 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 US, 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 Jul 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.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
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 (S$25.78) 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 US dollars per bottle and more, costing at least 2,126.07 yuan 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 US$100 per litre on Tmall. Remy Martin's cheapest label meanwhile fetches around US$110 to US$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 US$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. REUTERS
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
21 minutes ago
- Straits Times
As trade war truce with China holds, US lifts curbs for chip design software and ethane
Sign up now: Get ST's newsletters delivered to your inbox FILE PHOTO: Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. REUTERS/Florence Lo/Illustration/File Photo NEW YORK - The United States has lifted restrictions on exports to China for chip design software developers and ethane producers, a further sign of de-escalating U.S.-Sino trade tensions including concessions from Beijing over rare earths. Synopsys, Cadence Design Systems and Siemens, three of the world's largest electronic design automation (EDA) software developers, said on Wednesday they are restoring access to their software and technology for customers in China. Earlier in the day, the U.S. also sent letters to ethane producers to rescind a restrictive licensing requirement on exports to China imposed in late May and June. The restrictions on EDA software developers and ethane producers were just some of many countermeasures imposed by U.S. President Donald Trump's administration in response to China's export suspension of rare earths and related magnets in April. Beijing's move on rare earths, part of retaliation against Trump's earlier tariffs this year, has upended supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors. The issue threatened to scupper a bilateral trade deal. On Friday, China's commerce ministry said that following talks with the U.S., the two sides have confirmed a framework under which China will review export applications for controlled items while the U.S. will cancel corresponding restrictive measures. "The U.S. have escalated to de-escalate. They put restrictions on many more items in order to get the Chinese to back off on rare earths," according to a source familiar with discussions inside the U.S. government. Top stories Swipe. Select. Stay informed. Singapore $500 in Child LifeSG credits, Edusave, Post-Sec Education Account top-ups to be disbursed in July Singapore Over 40% of Singaporean seniors have claimed SG60 vouchers: Low Yen Ling Singapore Man to be charged after he allegedly damaged PAP campaign materials on GE2025 Polling Day Singapore Scoot launches flights to Da Nang, Kota Bharu and Nha Trang; boosts frequency to other destinations Asia 4 dead, 30 missing after ferry sinks on way to Indonesia's Bali Singapore $1.46b nickel-trading scam: Ng Yu Zhi's bid for bail midway through trial denied by High Court Asia Thai opposition to hold off on no-confidence vote against government Business Singapore six-month T-bill cut-off yield tumbles from 2% to 1.85% "As the U.S. and China continue to hold to this framework agreement, we're gonna see a lot of these restrictions go away. Going back to a status quo, where we were at in Feb/March," said the source who was not authorised to speak to media and declined to be identified. EDA RELIEF Siemens said in a statement that it has resumed sales and support for Chinese customers after it was recently notified by the U.S. Department of Commerce that export control restrictions for customers in China were no longer in place. Synopsys expects to complete system updates to restore access and support to Chinese customers within three business days, according to a company letter to staff seen by Reuters. The U.S. Department of Commerce did not immediately respond to Reuters' requests for comment. Long-term restrictions on Chinese access to EDA software would have significantly hampered China's chip design industry. Synopsys, Cadence and Siemens command more than 70% of China's EDA market, Chinese state news agency Xinhua reported in April. It was not immediately clear if other countermeasures imposed by the U.S. have been lifted. These include the suspension of licenses for GE Aerospace to ship jet engines for the C919 aircraft of Chinese airplane maker COMAC and for nuclear equipment suppliers to sell to Chinese power plants. REUTERS
Straits Times
37 minutes ago
- Straits Times
China's DeepSeek ramps up hiring with job posts on LinkedIn
Sign up now: Get ST's newsletters delivered to your inbox DeepSeek's US rivals like ChatGPT-owner OpenAI and Facebook-parent Meta Platforms have been racing to lure top AI talent. – DeepSeek is ramping up its recruitment on LinkedIn, suggesting the Chinese artificial intelligence start-up may be looking to lure talent from outside its homeland. The Hangzhou-based company posted 10 positions on the Microsoft-owned jobs and networking platform over the last week, its first listings for several months. The jobs, posted in Mandarin along with their descriptions, included three roles focused on artificial general intelligence, or AGI. The positions are based in Beijing and Hangzhou. DeepSeek did not immediately respond to a request for comment. Similar jobs were posted earlier in 2025 on popular Chinese recruitment sites. In 2021, LinkedIn shuttered a localised version of its platform in China, meaning many potential job candidates viewing the listings would be based outside of the country. DeepSeek's rivals in the United States like ChatGPT-owner OpenAI and Facebook-parent Meta Platforms have been racing to lure top AI talent in a quest to dominate what could be world-changing technology. Top stories Swipe. Select. Stay informed. Singapore $500 in Child LifeSG credits, Edusave, Post-Sec Education Account top-ups to be disbursed in July Singapore Over 40% of Singaporean seniors have claimed SG60 vouchers: Low Yen Ling Singapore Man to be charged after he allegedly damaged PAP campaign materials on GE2025 Polling Day Singapore $1.46b nickel-trading scam: Ng Yu Zhi's bid for bail midway through trial denied by High Court Asia 4 dead, 30 missing after ferry sinks on way to Indonesia's Bali Asia Thai opposition to hold off on no-confidence vote against government Singapore Pedestrian-only path rules to be enforced reasonably; focus on errant cyclists: Baey Yam Keng Singapore Train service resumes across Bukit Panjang LRT line after power fault led to 3-hour disruption
Business Times
an hour ago
- Business Times
As end of tariff pause looms, Malaysia could ‘gain greater prominence' in trade: Maybank
[SINGAPORE] Malaysia may be poised to shine in the next phase of global trade, said analysts from Maybank Investment Banking Group. This is in light of a likely fresh wave of US-led tariffs under 'Trade War 2.0'. The overall pause on reciprocal tariffs set by US President Donald Trump will be lifted on Jul 9, with the leader broadly suggesting that he will not extend its deadline. Malaysia could become more competitive as a trading partner, said regional co-head of Maybank's macro research team, Chua Hak-Bin, on Tuesday (Jul 1). 'Outcome of the negotiations between US and key trading partners – including Malaysia – on US reciprocal tariffs as the end of the 90 days suspension approaches will be key to watch,' he added. The country's weighted average tariff rate stands at 12.6 per cent with the pause – lower than that of other regional counterparts, such as Indonesia's 16.9 per cent, the report indicated. On Wednesday, Trump announced that a new trade deal with Vietnam was reached. Exports from the South-east Asian country to the US would be tariffed at 20 per cent, while US exports to the latter would face no tariffs. Goods that were deemed to be transhipped via Vietnam to the US would also face a 40 per cent tariff. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Maybank analysts on Thursday said that the deal appears to be rather 'one-sided', compared to the other deals with the UK and China. They also noted it has not been officially confirmed by Vietnam. 'Vietnam may see some rewards for its efforts to get its tariffs reduced substantially, but the possibility of a full reduction to zero tariff or even a 10 per cent tariff could be slim,' the analysts said. 'This is why Vietnamese dong may continue to remain on the backfoot,' they added. Malaysia versus Vietnam Due to companies increasing their imports and boosting stockpiles before the next round of tariffs come into effect – also known as 'frontloading' – exports to South-east Asian countries are increasing exponentially as firms capitalise on the 90-day pause period, said Maybank. For example, Asean electronics exports grew 31.4 per cent year on year in April, accelerating from 17.8 per cent in Q1 2025. Chua said: 'In the first trade war earlier this year, the biggest beneficiaries of shifts in supply chains were Vietnam and Malaysia.' He observed that the frontloading boost is particularly strong in Vietnam, in addition to countries such as Malaysia, Thailand and Indonesia. In June, the country's benchmark VN Index touched a three-year high, buoyed by expectations that the final tariff rate after ongoing negotiations with the US will be significantly lower than the current headline rate of 46 per cent. Vietnam's visitor arrivals also continued to spike in Q1, around 130 per cent above 2019 levels, and above 140 per cent in Q2 this year, significantly faster than its peers in the South-east Asian region. 'But for the next round, in light of its potential wider gap in reciprocal tariff rates compared to Vietnam, Malaysia may catch up and gain greater prominence,' he said. The macro research analyst said that Malaysia will also likely remain at the lower band after the US unveils the finalised reciprocal tariffs, along with Singapore, whose current tariff rate is set at 5.1 per cent. In the event reciprocal tariffs remain, with key exemptions in the areas of pharmaceuticals, semiconductors and relevant equipment, and various metals and minerals, Malaysia's weighted average tariff rate is expected to rise to 17 per cent. Other countries in such a scenario could face up to 53.3 per cent in these tariffs such as Cambodia, while Indonesia may take on a tariff rate of 34 per cent, according to Maybank's estimates. Significant rebound potential amid weak market performance However, Malaysia's market performance has not been strong. As at Jun 19, it recorded a year to date decline of 8.6 per cent in US dollar terms – the second widest loss in Asia after Thailand. The FTSE Bursa Malaysia KLCI has also only been able to recover to pre-Apr 2 levels and is still in negative territory year to date. This is primarily due to macro overhang posed by pending semiconductor and electronics sector-wide tariffs which could severely disadvantage these key export industries, said Anand Pathmakanthan, head of regional equity research at Maybank. For context, Malaysia exports over US$10 billion of semiconductors to the US or around 3.3 per cent of its total exports. But Pathmakanthan is 'overweight' on the laggard Malaysian market, and is confident that it has 'the biggest rebound potential', with clarity around sector-specific tariffs in the areas of semiconductors and electronics. 'Investors can now refocus on robust domestic macro momentum per broad investment upcycle, resilient consumer spending (amid a forecasted rate cut in the third quarter of 2025 to provide further support), and maturing policy initiatives such as fiscal reforms and the up-and-coming Johor-Singapore Special Economic Zone,' he said. Lim Sue Lin, head of research of Malaysia at Maybank, said that the Malaysian government continues to be in negotiation with the US on these reciprocal tariffs while this report was written. 'A further risk that could arise from here is the extended Middle Eastern tensions,' she said. 'Softer macro and any market weakness in the second half of 2025 would offer investors an opportunity to accumulate stocks, especially the banks, which we believe stand out as long-term winners,' she added.
