Caught in the crossfire

Billy Odell Tucker-Robinson Founder & Host — Banking With Billy Network • Intelligence Network • Data Science • AI Research • World News
Published: 2026-09-26T06:24:12.925Z • Permanent link

A crisis is unfolding in the French Cognac industry, with sales plummeting as trade disputes with China and the US squeeze the export-dependent sector. Dominique Marc, a senior executive at Société Générale, a major French bank, notes that the industry has been struggling to adapt to changing global market conditions. "We're seeing a perfect storm of factors contributing to the decline, from tariffs to changing consumer preferences," she says. French Cognac producers, many of whom rely on EU support, are under pressure to diversify their exports and improve their competitiveness.

One of the key players in the dispute is Pernod Ricard, a French multinational spirits company that owns several prominent Cognac brands, including Remy Martin and Jameson Irish Whiskey. The company has been negotiating with the EU to secure support for its struggling export business. "We're working closely with the EU to find solutions to the challenges we're facing," says Laurent Doury, Pernod Ricard's Chief Operating Officer. The company has also been exploring new export markets, particularly in Asia, but faces stiff competition from other spirits producers. "We're seeing a significant increase in imports of Chinese and US spirits into Europe," notes Marc.

The EU's support for French Cognac producers has been a topic of debate in Brussels, with some arguing that the industry is not doing enough to modernize and diversify its products. The European Commission has been working to promote EU agricultural policies, including support for wine and spirits producers. However, the industry's export-dependent nature means that it is heavily reliant on EU support, which has been under pressure in recent years due to budget constraints.

The crisis in the French Cognac industry has significant implications for the global spirits market, with potential knock-on effects for other EU agricultural sectors. The industry's decline could also impact research communities that rely on data from the sector, such as the International Wine and Spirit Record, which tracks global spirits trade. Furthermore, the EU's support for French Cognac producers is a key aspect of its agricultural policy, and the industry's struggles could lead to calls for greater support for other EU agricultural sectors.

The impact on affected companies, such as Pernod Ricard and Société Générale, could be significant, with potential implications for their shares and their ability to invest in new products and markets. The decline of the French Cognac industry could also lead to a loss of competitiveness in the global spirits market, which could have long-term consequences for the sector as a whole. As such, policymakers and industry leaders will be closely watching the situation to see how it unfolds.

The crisis in the French Cognac industry is part of a larger pattern of challenges facing the global spirits market. The rise of craft and premium spirits has led to increased competition, with many small and medium-sized producers competing for market share. Meanwhile, changing consumer preferences, driven by trends such as health and wellness, have led to increased demand for low- and no-alcohol spirits. The EU's support for French Cognac producers is also part of a broader pattern of agricultural policy, which has been under pressure in recent years due to budget constraints.