What proportion of the total tariff impact is linked to Chinese cognac duties?

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Chinese Cognac Tariffs Account for a Significant Portion of Pernod Ricard's Total Tariff Impact

Chinese cognac duties represent a substantial part of the estimated €200 million annual tariff impact on Pernod Ricard, with figures suggesting between €130 million and €140 million are directly linked to these levies. This significant financial pressure stems from temporary tariffs already imposed by China on European brandy imports, which have directly affected the sales performance of Pernod's prominent Martell cognac brand. The potential for these tariffs to become permanent has led Pernod Ricard to revise its financial outlook for 2025 and subsequent years.
Chinese Cognac Duties as a Major Financial Burden

The financial strain on Pernod Ricard due to tariffs is considerable, with approximately two-thirds of the total estimated annual impact being attributed to duties imposed by China specifically on cognac. This concentration of impact highlights the strategic importance of the Chinese market for Pernod's cognac portfolio and the vulnerability of its business to trade policy changes in that region. The company's finance chief, Helene de Tissot, articulated these figures to analysts during a recent results call.
Broader Tariff Landscape Affecting Pernod Ricard

While Chinese cognac duties are a primary concern, the company faces broader tariff threats from other major markets. The United States, under President Donald Trump, has previously threatened substantial tariffs on goods from various regions, including Mexico, Canada, and the European Union. These diverse tariff impositions could affect a wide array of Pernod Ricard's products, ranging from Jameson Irish whiskey to Codigo 1530 tequila, further compounding the financial challenges.
Mitigation Strategies Underway

In response to these escalating tariff impacts, Pernod Ricard is actively pursuing mitigation measures that could potentially offset around 50 per cent of the total financial burden. Some of these strategies have already been implemented in China, demonstrating a proactive approach to managing the consequences of trade disputes. These initiatives include seeking cost savings through organisational adjustments, such as reducing the size of its operations in China, as well as making changes to its supply chain and revenue growth management practices.

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What proportion of the total tariff impact is linked to Chinese cognac duties?

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