Hennessy workers strike over Chinese bottling plans

In a bid to circumvent Beijing’s anti-dumping levy imposed on brandy and Cognac, LVMH-owned Hennessy said it would trial bottling its product in China, prompting hundreds of French workers to go on strike.

In October, the Chinese Ministry of Commerce (MOFCOM) said it would impose provisional anti-dumping duties against imports of European brandy in retaliation to the EU approving additional duties of up to 35% on Chinese electric vehicles.

With China being the second-largest export market for Cognac after the US, and the industry’s most profitable territory, accounting for US$1.7 billion in exports last year, the tariff is predicted to have lasting effects on market dynamics.

One way to circumvent the tariffs would be for Cognac producers to ship the liquid to China and bottle it locally, however this would be a “disaster” for workers within the Cognac sector, said Michael Lablanche, a regional representative for the CGT labour union.

According to Lablanche, Hennessy management told employee representatives on Tuesday that it planned to first send a sample shipment of 1,000 litres of its VSOP Cognac to China to test the product’s stability.

The test shipment is due to take place on 15 December, local newspaper Charente Libre reported.

If the test is successful, Hennessy will relocate the whole VSOP bottling line to China. This will account for 600,000 cases of the Cognac, or all of its 2025 China sales, Lablanche said.

When the news broke, approximately 500 workers – half the workforce – at Hennessy’s bottling plant in Cognac stopped work. The strike is said to be ‘open-ended’.

Video and photos posted on social media showed large groups of people gathering outside Hennessy’s headquarters in Cognac, some wearing jackets showing the logos of CGT and Force Ouvriere, another union.

The Bureau National Interprofessionnel du Cognac, an industry lobby group, has repeatedly urged the French government to negotiate a solution to protect the Cognac industry.

“Some houses may be forced to explore all options that would enable them to maintain the presence of the appellation on the Chinese market,” it said in a statement on Monday.

Earlier this month, Rémy Martin said it will raise its Cognac prices in China to help mitigate the impact of tariffs imposed by Beijing, and will also looks to cut costs in areas such as manufacturing and advertising spend. However, according to a spokesperson for the house, the brand has no plans to relocate its bottling line.

The Spirits Business has reached out to Hennessy for comment.