French cognac maker Hennessy has suspended a plan to bottle its brandy in China to avoid import tariffs, staff briefed by management said on Tuesday, after hundreds of workers went on strike last week to protest the move.
Hennessy, owned by luxury group LVMH, had said it was exploring options to deal with anti-dumping measures imposed by Beijing last month, including shipping cognac to China for bottling to circumvent tariffs.
The company told unions and employee representatives on Monday it had dropped the plan after a meeting last week between the French and Chinese presidents in Brazil allowed talks on the issue to resume, said Mathieu Devers, a Hennessy technician and employee representative.
Hennessy did not respond to requests for comment on the plan’s suspension.
“We are satisfied with the suspension even if unfortunately it remains only a suspension,” said Devers, noting that the plan could resume if political negotiations fail to make progress.
China is the second-largest export market for cognac after the United States and the industry’s most profitable territory, accounting for US$1.7 billion in exports last year.
