(Bloomberg) -- Hennessy backed down from a test of bottling Cognac in China as a way around tariffs after workers at the LVMH label in France went on strike last week in protest.
Management told Hennessy workers this week it was suspending shipments of Cognac vats to China, which would have happened over the next few days, Frederic Merceron, a Hennessy worker and Force Ouvriere union representative, told Bloomberg.
Last week, French President Emmanuel Macron said he intended for Prime Minister Michel Barnier to visit China in the first quarter of next year to seek a solution on tariffs. That prospect prompted Hennessy to reconsider its plans, Merceron explained.
China has imposed higher import duties on Cognac, alleging dumping practices. The move followed a European Union decision to impose new levies on imported Chinese electric vehicles.
A representative for Hennessy, owned by Paris-based luxury group LVMH Moët Hennessy Louis Vuitton SE, didn’t immediately reply when asked to comment.
Despite the temporary victory for Cognac workers, another protest is planned for Thursday. Stephane Simonnet, a Force Ouvriere representative at Remy Martin, said workers at that Remy Cointreau SA brand will be urged to join a wider industry strike that day in Cognac.
A representative for Remy Martin declined to comment.
The planned protest will push for a local bottling requirement to be added to Cognac’s protected geographical designation of origin, similar to the rules for Champagne.
“We remain very vigilant,” Merceron said.
A representative at Pernod Ricard SA’s Martell, another French Cognac label, didn’t immediately reply when asked to comment.
Overall, the industry employs about 70,000 people via direct and indirect jobs, according to the Bureau National Interprofessionnel du Cognac, a trade group.
--With assistance from Sabah Meddings.
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