Armagnac Producers Face Trade Winds from U.S.adn China
Table of Contents
- Armagnac Producers Face Trade Winds from U.S.adn China
- Armagnac: Navigating Trade Winds adn Market Challenges
- What is Armagnac and Where Does It come From?
- What Challenges Are Armagnac Producers Facing?
- How Are Trade Tensions Affecting Armagnac Sales?
- Who are the major players in the Armagnac market?
- Where Does Armagnac Export?
- How is the Armagnac Delord family buisness doing?
- What is the impact of tariffs on Armagnac prices?
- Where can I get more information on Armagnac production and trade?
- What is the future for Armagnac?
GERS, France (AP) — Armagnac producers are bracing for potential disruptions in key export markets as trade tensions simmer between the U.S. and Europe, and China.
While the threat of a 200% tariff on European alcohols, initially floated, appears too have receded, Armagnac, often called Cognac’s “little brother,” faces existing challenges in China and potential hurdles in the United States.
Olivier Goujon, director of the National Interprofessional Office of Armagnac (BNIA), speaking from a Gers property surrounded by barrels of the brandy, described the situation as complex. “We have not yet left the Chinese anti-dumping tax conflict, and we are going to get into a conflict with our other major market, the United States,” Goujon said.
Jérôme Delord,co-owner of Armagnac Delord in Lannepax,adopts a philosophical approach despite the uncertainty. “Inevitably, we are worried,” Delord said while unpacking a new oak barrel. “Afterwards, it is indeed not the first time that things have happened a little binding.”
Delord and his brother Sylvain, great-grandsons of an itinerant distiller, took over the family business in 2001 with 11 hectares of vineyards and six employees. Their father previously directed the company.
Now, the vineyard spans more then 60 hectares, supporting 17 permanent employees and the equivalent of two additional full-time positions filled by seasonal workers. The company’s turnover is approximately 6.5 million euros, with 20% of sales in France and 10% in the United States, representing growth in exports, according to Jérôme Delord.The company also produces Agen prunes with Armagnac.
Tariff Threats and Market Impact
In March, the then-President Donald Trump threatened to impose 200% tariffs on European alcohols if the EU did not withdraw its tariffs on American bourbon, implemented in response to U.S. surcharges on steel and aluminum. Subsequently, the U.S.announced additional 20% tariffs on all EU products, including Armagnac, which had a total turnover of nearly 44 million euros in 2024.
“When a 20% tax will be applied to our Armagnacs, a product that will start $100 from Armagnac, will arrive at 120 dollars on the market,” Goujon said. “It destabilizes the products that are on the market.”
russia Leads, China Declines
According to BNIA data, Russia is currently the top importer of Armagnac, accounting for 24% of total export value. The United States follows with 14%, while China holds 8%, with imports having decreased by 38% in the past year. As October, Chinese customs have required a bank guarantee on European brandy exports, including Armagnac and Cognac. Goujon also noted that slower economic growth in China is impacting imports.
Despite these challenges, Jérôme Delord remains optimistic about Armagnac’s future. “There are markets that will fall, there are markets that will go up, but we need to continue to produce,” he said. Armagnac, an amber-colored spirit with a minimum of 40% alcohol by volume, requires several years of aging. Its production dates back to at least 1310, as evidenced by a document touting its 40 virtues. “We like to say that it is the oldest wine brandy in France. And no one says the opposite,” Delord added.
This article provides insights into the challenges and opportunities facing Armagnac producers in the face of global trade tensions, focusing on the United States and China. Let’s break down the key aspects.
What is Armagnac and Where Does It come From?
armagnac is a type of brandy produced in the Armagnac region of southwestern France. It’s frequently enough referred to as Cognac’s “little brother.” It is an aged amber-colored spirit containing a minimum of 40% alcohol by volume. Its production dates back to at least 1310, with a document highlighting its virtues.
What Challenges Are Armagnac Producers Facing?
Armagnac producers are currently navigating several challenges:
Trade Tensions: Disputes with the U.S. and China are impacting the Armagnac market.
U.S. Tariffs: Potential and existing tariffs on European alcohols, including Armagnac, threaten to increase prices and destabilize the market. A 20% tax on Armagnac could raise the price of a $100 bottle to $120.
China’s Market Decline: Imports to China have decreased, with customs requiring bank guarantees on European brandy exports. Slower economic growth in China is also a factor.
Export Market Disruptions: Producers are bracing for potential disruptions in their key export markets.
How Are Trade Tensions Affecting Armagnac Sales?
The main point of contention comes with the rising tariffs. In March, then-President Donald Trump threatened to impose 200% tariffs on European alcohols. While the threat appears to have receded, the U.S. announced 20% tariffs on EU products. This creates stress for producers and raises prices in key export markets.
Who are the major players in the Armagnac market?
The meaningful players in the Armagnac market, according to the provided text, and their respective actions or roles, are:
Armagnac Producers: They are the primary focus of the article. They are dealing with economic challenges related to trade disputes and are facing the task of exporting and producing.
Jérôme Delord: The co-owner of Armagnac Delord is an Armagnac producer and provides firsthand insights.
Olivier Goujon: The director of BNIA.
BNIA (National Interprofessional Office of Armagnac): Provides data and insights into the industry.
Chinese Customs: They have implemented measures (bank guarantees) that affect European brandy exports.
The United States:
Threatened to impose tariffs on European alcohols.
announced additional 20% tariffs on EU products.
Russia: Represents the top importer of Armagnac.
Where Does Armagnac Export?
The primary export markets for Armagnac, based on the provided data, are:
Russia: 24% of total export value
United States: 14% of total export value
China: 8% of total export value
How is the Armagnac Delord family buisness doing?
Armagnac Delord, a family-run business, has demonstrated significant growth despite the challenging trade environment. In 2001, the business was started on 11 hectares of vineyards with six employees. Now, the vineyard spans over 60 hectares and supports 17 permanent employees and two additional full-time positions. The company’s turnover is approximately 6.5 million euros, with 20% of sales in France and 10% in the United States, indicating growth in exports. They also produce Agen prunes with Armagnac.
What is the impact of tariffs on Armagnac prices?
A 20% tax on Armagnac can increase the price of a $100 bottle to $120, potentially destabilizing the market.
Where can I get more information on Armagnac production and trade?
For detailed data and information, the BNIA (National Interprofessional Office of Armagnac) can be accessed. You can find current information on the state of the market and relevant trade information at their website.
What is the future for Armagnac?
Despite the challenges,there is optimism within the industry. With its long history and established reputation, Armagnac is expected to continue production and maintain a presence in global markets.
