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Rémy Cointreau to up Cognac prices in China
French spirits giant Rémy Cointreau has said it will be “obliged” to increase Cognac prices for consumers in China as a result of the newly-imposed tariffs.
Luca Marotta, chief financial officer at Rémy Cointreau, has told investors that the company has conducted research on the impact of tariffs and will “be obliged” to up prices as a result.
The group declined to elaborate on the timing or extent of price increases, or the scale of the potential impact on volumes in China, according to The Spirits Business.
In the company’s sales report for the first half of the year (H1) released last week it slashed its full-year guidance, delaying its recovery from persistent double-digit sales declines.
It said it now expected another double-digit percentage fall in annual organic sales, following a 19.2% drop last year, rather than a gradual recovery led by the second half.
As for China’s Cognac tariffs, it stated the impact ‘would be marginal for the 2024-25 fiscal year, and the group would activate its action plan to mitigate the effects from 2025-26’.
Additional import duties on EU brandy came into force on 11 October 2024. Importers of all wine-based spirits originating in the European Union (namely Cognac, Armagnac and brandies) were told to lodge deposits for shipments coming into the country. Deposits are equivalent to the level of duty announced on 29 August, averaging 35%.
The tariffs impact all wine spirits, marc and brandies imported by China from the EU in containers of less than 200l.
Other drinks firms, including Martell owner Pernod Ricard and Hennessy owner LVMH, have reportedly said they will ‘watch what competitors do’ in terms of price increases before making their own moves.
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