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US tariffs boost trade in old Cognac

Published:  11 December, 2019

US tariffs on wine and whisky are driving the market in Cognac, a leading UK supplier has revealed.

The tariffs, which came into effect on 18 October, apply to a wide range of EU goods totalling $7.5bn. They are part of a long-running dispute between the US and the EU over state support for aircraft manufacture.

While French wines and Scottish whisky have been hit by the tariffs, Cognac has so far escaped.

David Baker, MD at Hermitage Cognacs, said: “We’re now seeing a real surge in demand for Cognacs from the mid and early 20th century, even some from the 19th century.

“Many merchants are worried about the impact of US duty on imports of Champagne, wine and whisky into America, and are looking to other spirits to replace that.”

Cognac exports to the US were rising even before the tariff crisis. Some 94.3 million bottles were shipped to the US in the year to end July 2019, accounting for 45% of all Cognac exports. Exports to North America as a whole were up 8.8% year on year, according to the BNIC, with the US representing over 96% of the North American market.

The thirst for high-quality Cognac is extending to bottles from the pre-phylloxera era, Baker added.

The Phylloxera aphid caused widespread destruction in French and other European vineyards in the second half of the 19th century.

“Many of the pre-phylloxera cognacs we have supplied this year come from very old estates, some where Cognac production may have ceased years ago,” Baker said.

“The interest and historic value they hold is driving demand, and we are having to scour the cellars of the region for more rare bottles.”