French cognac industry faces major sales slump amid trade disputes

The French cognac industry is facing a severe crisis, with sales plummeting from 230 million bottles in 2023 to 140 million bottles. This decline of 90 million bottles represents a nearly 40% drop in volume.

Producers attribute the slump to escalating trade tensions. The sector is highly vulnerable because 98% of its production is exported outside the European Union. China, which accounts for approximately 25% of exports, has implemented retaliatory tariffs following EU measures against Chinese electric vehicles. Additionally, the United States remains the largest market, representing roughly half of all cognac exports, and faces its own tariff challenges.

Major trading houses, including Rémy Martin, Hennessy, Martell, and Courvoisier, have reduced orders from local winegrowers due to the drop in demand. This contraction is impacting the entire regional supply chain, affecting barrel makers, transport companies, and equipment suppliers. The industry supports approximately 70,000 direct and indirect jobs in France.