French luxury giant LVMH (FR:MC) (LVMUY), which owns a long list of luxury brands, has paused its plan to ship Hennessy Cognac in bulk to China for bottling after backlash from the Cognac region and trade unions, according to Terre de Vins. The move was intended to offset new Chinese tariffs on EU brandy imports but sparked strikes and protests that included a planned demonstration outside the Bureau National Interprofessionnel du Cognac (BNIC). Hennessy stated that the project is suspended as it monitors the political situation, but tensions remain high.
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China introduced the tariffs last month after accusing EU exporters of dumping brandy, a move that is widely being seen as retaliation for EU tariffs on Chinese electric vehicles. LVMH had acknowledged weak demand for Cognac in China during its recent earnings call, which further complicates its position in one of the product’s largest markets. Competitors like Campari, owner of Courvoisier, confirmed that it has no plans to bottle in China, while Pernod Ricard and Rémy Cointreau declined to comment, according to Just Drinks.
The EU has now launched a World Trade Organization case against China’s brandy tariffs. LVMH’s deputy finance director, Cécile Cabanis, said the company has stockpiled inventory to minimize short-term impacts but remains cautious about long-term effects. Future strategies could include price adjustments or duty-free sales shifts, with more details expected in the next quarter.
Is LVMH a Good Stock to Buy Today?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LVMH stock based on 10 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 14% decline in its share price over the past year, the average LVMH price target of €691.67 per share implies 18% upside potential.
