PRODUCERS of Cognac and Champagne are seeking to ship more bottles to the US as they brace for potential extra tariffs under President-elect Donald Trump.
LVMH’s Cognac brand Hennessy has increased consignments to the US following Trump’s victory last month, while its label Moët & Chandon is among the Champagne makers that intend to do the same, according to people familiar with the drinks industry, who asked not to be named discussing private business decisions.
Representatives for LVMH Moët Hennessy Louis Vuitton declined to comment.
Trump has vowed to impose new import duties on goods from countries including China and Canada after he is sworn into office on Jan 20. It’s not yet known whether he plans to hit French luxury goods.
“President Trump has promised tariff policies that protect the American manufacturers and working men and women from the unfair practices of foreign companies and foreign markets,” said Brian Hughes, a spokesman for the president-elect. He added that the incoming administration intends to “make life affordable and more prosperous” for the US, without elaborating on policy specifics.
The additional deliveries to the US would only represent a few months’ worth of regular shipments, the people said. One of the people described the extra exports as “marginal,” while another person said Hennessy had already increased shipments by about 10 per cent annually.
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While the volumes wouldn’t be game-changing, they would give producers a couple of months’ respite, some of the people said.
Cognac makers are also likely redirecting bottles that would have otherwise gone to China, some of the people said. Since that market has taken a sharp downturn, it makes more financial sense to send them to America, they added. Hennessy’s Very Special Cognac is particularly popular in the US, some of the people said.
Alcoholic drinks can be shipped early as they are non-perishable and will not lose value. LVMH’s wines and spirits unit also exported additional products during Trump’s first term to avoid potential tariffs, some of the people said. In the end, the US and the EU agreed to suspend tariffs on billions of US dollars of each other’s products.
The US is the biggest export market for Champagne and Cognac, according to data compiled by the drinks’ trade groups.
Last year, almost 27 million bottles of Champagne were shipped to the US for revenue of almost €810 million (US$853 million), according to Comité Champagne. Cognac makers shipped 58.4 million bottles to the US in the same period, the Bureau National Interprofessionnel du Cognac said. BLOOMBERG
