Hennessythe world's largest producer of cognac, is now in the middle of a trade dispute that has sparked a strike among the brand's workers in France. Earlier this week, staff at the Hennessy factory staged a mass strike to protest a proposed move to move bottling of the brandy from France to China.
Via a New York Times report, Hennessy revealed plans to bottle its prized product in China to offset the cost of import tariffs, with French President Emmanuel Macron calling on Chinese President Xi Jinping to end the tariffs. As news of the bottling move broke, about 500 workers at the company's plant in southwest France walked out, making up half of its workforce. So far, the strike has been going on for two days since it started last Tuesday (November 21).
China has imposed tariffs on European brandy, a category of cognac falls under the category, 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's vote to impose higher tariffs on Chinese-made electric vehicles, with France being the first voice in the charge. In contrast, European tariffs on cognac will deeply affect all brandy made in France.
The strike 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 worldwide. Hennessy says it does not plan to move all of its production to China and will test the program by shipping distilled brandy in casks to be bottled there, thereby bypassing the brandy duties.
The strike has the potential to last more than a week as both sides continue to hold a day of hammering to discuss the issue between management and workers.
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