Hennessy, the world’s largest producer of cognac, now finds itself in the middle of a trade dispute that sparked a strike among the brand’s workers in France. Earlier this week, Hennessy factory staff organized a mass walkout strike to protest a proposed move to shift the bottling of the brandy from France to China.
By way of a New York Times report, Hennessy unveiled plans of bottling its prized product in China to offset the costs of import tariffs, with France’s President Emmanuel Macron requesting of China’s President Xi Jinping to end the tariffs. As the news broke regarding the bottling move, around 500 workers at the company’s factory in southwestern France walked off, which makes up half of its workforce. Thus far, the strike has gone on for two days since beginning this past Tuesday (November 21).
China has imposed tariffs on European brandy, a category cognac does fall under, and the country is one of Hennessy’s top markets. The plan to move the bottling operation is to save the company costs by not paying the hefty tariffs. The tariffs imposed by China are likely in response to the European Union voting to levy higher tariffs on electric vehicles produced by China with France being the leading voice in that charge. Conversely, the European brandy tariffs will deeply affect any brandies made in France.
The strike has spread to other cognac producers, collectively known as the Big Four, which include Martell, Rémy Martin, and Courvoisier. The quartet produces much of the cognac consumed globally. Hennessy says it has no plans to move its entire production to China and will test out the program by sending distilled cognac in vats to bottle there and thus bypassing the brandy tariffs.
The strike has the potential to run longer than a week as both sides continue to hammer down a day to discuss the matter between management and the workers.
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