Shares in France's premium spirits sector moved lower on Wednesday following new export data and a signal from Beijing that further trade measures could be possible. Stocks in Pernod Ricard and Rémy Cointreau fell after the latest French figures showed wine and spirits shipments slipping for a third consecutive year, reaching their lowest volumes in more than twenty years.
The statistics highlighted a steep reduction in exports to China, alongside weaker shipments to the United States. France remains a major supplier of cognac to China, and the Chinese market accounts for a substantial share of France's premium spirits volumes.
A social media account called Yuyuan Tantian - which is affiliated with Chinese state broadcaster CCTV - reported that China could initiate investigations into French wines or apply "reciprocal tariffs" on related European Union products. The post framed such actions as a possible response if France presses the European Union to impose new tariffs on Chinese goods.
The warning followed publication of a French government strategy paper that recommended the EU consider either a 30% across-the-board tariff on Chinese imports or a 30% depreciation of the euro versus the renminbi as ways to counter rising imports.
China has already carried out anti-dumping investigations into European brandy, including products exported by Pernod Ricard and Rémy Cointreau. Earlier phases of that probe included provisional duties on certain European spirits.
Market context and implications
The export data and the Chinese signals combine to create renewed uncertainty for companies whose revenues depend on premium spirits exports. For firms like Pernod Ricard and Rémy Cointreau, exposure to the Chinese market has been a significant factor in their premium segment shipments; the latest developments underscore how trade disputes and shifting export volumes can affect market sentiment.
What is known and what remains uncertain
- French wine and spirits exports fell for a third straight year and hit their lowest volume in over two decades.
- Exports to China and the United States both contracted, with China seeing a sharp drop.
- China signalled potential countermeasures via a CCTV-affiliated social media account, and a French strategy paper recommends drastic EU measures against Chinese imports.