LVMH cognac makers spared from China's tariffs, but EU spirits sector remains under pressure

Fashion Network

a day ago

China has opted to exempt key cognac producers — including LVMH, Pernod Ricard and Rémy Cointreau — from newly announced tariffs of up to 35% on EU brandy, provided they agree to minimum pricing terms. The decision follows months of tension between the EU and China over anti-dumping investigations and comes as luxury groups continue to navigate shifting regulatory landscapes in global markets.
The exemption applies only to companies that commit to selling above a set minimum price. For other producers — or those who breach the agreed price terms — China will apply duties of up to 34.9% for a period of five years, beginning Saturday, according to a statement from the Chinese government.
SpiritsEUROPE, the trade body representing EU spirits producers, welcomed the partial relief for major cognac houses but warned that broader punitive measures remain in place. The organisation called for all restrictions to be lifted, noting that such tariffs risk further straining EU–China trade relations at a time when collaboration is essential.
'While we welcome the conclusion of price undertakings with certain companies, we urge that this option be extended to all compliant firms,' said SpiritsEUROPE Director General Hervé Dumesny.
For LVMH, whose Moët Hennessy division includes high-end cognac labels such as Hennessy, China remains a critical growth market not only for wines and spirits, but also across fashion, jewellery and cosmetics. Any escalation in trade disputes — even outside of fashion — could influence wider sentiment and regulatory scrutiny toward European luxury brands operating in the region.
The move echoes past trade tensions, such as the delisting of the e-commerce platform Wish in 2021, and reinforces how trade disputes across categories — including spirits — can have ripple effects on broader luxury exports.
With China representing a key consumer base for European luxury houses, evolving tariff frameworks remain closely monitored across the sector, particularly as brands continue to adapt to shifting consumer behaviour and geopolitical uncertainty.