France's cognac producers weather climate change, tariffs

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🗞️ Driving the news: France’s cognac industry is under mounting pressure as climate change and geopolitical tensions reshape global demand and production conditions
• Cognac exports to China have halved since anti-dumping duties were imposed in late 2024, costing producers over €50 million monthly
• Meanwhile, U.S. tariffs and the loss of the Russian market further threaten the region’s €3.9 billion export sector, prompting producers to reconsider long-term strategies without abandoning generational traditions

🔭 The context: Cognac production is tightly regulated within a protected geographic indication and relies on grapes from six distinct crus in southwest France
• Though demand hit record levels in 2022, recent trade disputes — including Chinese retaliation for EU tariffs on electric vehicles — have disrupted major markets
• At the same time, climate change is altering grape ripening patterns, pushing acidity levels down and complicating harvests with increased risks of hail, frost, and disease

🌍 Why it matters for the planet: The story illustrates how climate impacts are cascading into cultural heritage sectors and rural economies
• As global temperatures rise, traditional crops are becoming less viable, prompting some growers to pivot to alternative products such as olives or truffles
• The shift also spotlights the broader challenge of adapting agricultural practices — and preserving artisanal industries — under intensifying environmental and economic stress

⏭️ What's next: The Bureau National Interprofessionnel du Cognac (BNIC) is urging government support to protect the 70,000 jobs tied to the industry
• Producers are exploring diversification, including organic cognacs, sustainable packaging, and new product categories like cocktails and aperitifs to reach younger consumers
• Market recovery will depend on easing trade barriers and continued innovation to navigate climate volatility without compromising the product’s quality

💬 One quote: “There have always been crises. My philosophy won’t change,” — Alain Reboul, seventh-generation winemaker, who continues to invest in his vineyards despite economic headwinds

📈 One stat: Exports to China have dropped by 50%, leading to losses of over €50 million per month for French cognac producers

See on illuminem's Data Hub™ the sustainability performance of Rémy Cointreau, and Pernod Ricard and their peers Campari, and Diageo

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