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How Trump’s tariffs on cognac hit a French success story

For the last decade, owners of cognac distilleries have seen their sales more than double to the United States, making their spirit one of France's fastest-growing major exports. Then Donald Trump came along.

How Trump's tariffs on cognac hit a French success story
Visitors attend a cognac tasting in Hennessy's tasting room in Cognac, southwestern France, on February 9th 2018. Photo: AFP

While the French are small-time drinkers of cognac, Americans consume almost one in two bottles produced in the vineyards north of Bordeaux thanks in part to the alcohol being promoted by US rappers as a symbol of wealth and luxury.

And while millionaires like Snoop Dogg and Jay-Z will still be able to afford their beloved “yak”, many other Americans might find it out of reach after US import tariffs of 25 percent come into force on Tuesday.

The US “is a fast-developing and priority market for our industry, which is even showing growth this year despite the impact of Covid-19,” the director general of the BNIC cognac industry body, Raphael Delpech, told AFP.

A producer smells a barrel of ageing cognac in Domaine Marcadier-Barbot in Segonzac, southwestern France. Photo: AFP

The tariffs were confirmed by the Trump administration on New Year's Eve, marking the latest trade salvo from the outgoing US president and a further escalation of a long-running transatlantic feud.

Cognac, which is to be taxed along with other grape-based spirits from France and Germany, is a collateral victim of a dispute between Washington and Europe over subsidies given to their commercial plane makers, Boeing and Airbus.

European wines, cheeses and olive oils have been subjected to 25-percent import duties in the US since October 2019, while Europe has hit products from American orange juice to ketchup with its own measures.

“All French wines and spirits, not only cognac, are now being affected by diplomatic tensions that have nothing to do with us,” Delpech lamented.

FEVS, a French exporters' association, has estimated that the wine and spirit sector could lose more than €1 billion ($1.2 billion) a year in US sales due to the tariffs unless incoming president Joe Biden reverses them.

Cognac bottles. Photo: AFP

'Sipping Remy'

The trade spat has exposed the extent to which the centuries-old cognac houses of the Charente region have become dependent on American thirst for their products, some of which retail for hundreds of dollars.

The prospect of long-term tariffs has revived memories of the only major downturn the industry has known in the last 20 years during the 2008-2009 global financial crisis.

Explosive growth since then – exports to the US have doubled to over 100 million bottles a year – has been fuelled by the unlikely marriage of conservative cognac dynasties in their turreted chateaus to the flashy world of US hip hop.

Cigar-puffing Jay Z rapped about “sipping Remy on the rocks with my crew” in his 1996 hit “Can't Knock The Hustle”, while Busta Rhymes released “Pass The Courvoisier II” in 2001, a landmark moment for the industry.

Since then, major brands like Remy Martin, Hennessy, Courvoisier, Martell or Louis XIII have piled in on the commercial opportunities, forging partnerships with performers from Pharrell Williams, Nas, A$AP Ferg, to Quavo.

While favoured neat by rappers, cognac is also popular and widely drunk in cocktails by Americans.

Delpech says the industry has built “a very strong link with American consumers stage by stage over decades, by investing enormously.”

Short-term pain?

Jean-Pierre Cointreau, head of the high-end Maison Frapin cognac house, says he believes stocks in the US are high enough so that consumers will not see an immediate impact on prices.

And he hopes that the incoming Biden administration, which includes many francophile figures including the next secretary of state Antony Blinken, will work to reverse the tariffs. 

“I tend to think that the French and American governments are committed to sorting out this problem,” he told AFP.

His company also has strong links in Asia, particularly in China, where cognac also benefits from its association with France's reputation for luxury.

“It's making this period very complicated,” Cointreau said of the US tariffs, adding that bar and restaurant closures due to Covid-19 shutdowns, plus a reduction in duty-free and airline sales, were hitting the whole industry.

“There's an accumulation of problems that are very regrettable.”

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WORKING IN FRANCE

How to get a summer job in France

As the summer holidays approach in France, many employers are looking for seasonal workers - so if you're looking for a summer job, here's how to go about it.

How to get a summer job in France

There are thousands of employment offers in France – a simple internet search for jobs d’été came up with numerous jobs boards offering work in France, while the government-backed Centre d’Information et de Documentation pour la Jeunesse (CIDJ) offers advice and information on all aspects of life for young people in France, including finding seasonal work and summer placements.

Sectors including agriculture, hospitality and tourism are always recruiting in the summer, seeking fruit-pickers, holiday camp workers and serving/hotel staff.

But what are the rules for people seeking summer jobs?

READ ALSO Vendange: What you really sign up for when you agree to help with the French wine harvest

Age

Children from the age of 16 (under certain circumstances, the age limit drops to 14) who are legally resident in France can work as long as they have written authorisation from their parents or legal guardians. A model authorisation letter is available here

Those under the age of 18 cannot undertake certain jobs for health and safety reasons.

In the following circumstances, children as young as 14 or 15 can work during school holidays.

  • The holidays must last at least 14 days;
  • The child must work no more than half the days of the holiday – so, if a vacation period is two weeks, they can work for no more than one of those weeks;
  • The child is given ‘light duties’ that offer no risk to their safety, health, or development;
  • From the age of 15 and if the child has completed their troisieme education, a minor can register for an apprenticeship. 

Salary

Salary is usually paid monthly and will have a payslip. For those aged 18 and over, pay will be at least equal to the minimum wage.

 For those aged 14 to 17, who have less than six months’ professional experience, the minimum allowed rate is 80 percent of the minimum wage. For those aged 17 to 18, the rate rises to a minimum of 90 percent of France’s minimum wage.

  • The minimum wage in France is currently €10.85 gross per hour (€1,645.58 gross per month based on a 35-hour week);
  • the employment contract is fixed-term and can take different forms (fixed-term contract, seasonal employment contract, temporary employment contract, etc);
  • Seasonal employees are subject to the same obligations as the other employees of the company and have access to the same benefits (canteens, breaks, etc.).

Under 18s have certain additional protections:

  • between the ages of 14 and 16, during school holidays, employees on any contract cannot work more than 35 hours per week nor more than 7 hours per day;
  • They cannot work at night;
  • Those aged 14 to under 16 working during their school holidays can only be assigned to work which is not likely to harm their safety, their health or development.

Right to work in France

If you’re a French citizen or hold permanent residency in France then you have the right to work, but for foreigners there are extra restrictions.

Anyone who holds the passport of a EU/EEA country or Switzerland, is free to work in France or to travel to France seeking work without needing a visa or work permit.

Most other people will need permission to work in France – even if it’s only for a short period or for casual work such as grape-picking. Depending on your country of origin you may need a visa – everything you need to know about that is here.

In addition to the visa, you may also need a work permit, which is the responsibility of the employer.  To employ anyone in France for less than 90 days, an employer must get a temporary work permit – before the prospective employee applies for a short stay visa. This permit is then sent to the embassy at which the employee is applying for a visa.

If you come from countries including the UK, USA and Canada you can spend up to 90 days in France without a visa – but you may still need a work (convention d’accueil) if you want to work while you are here.

READ ALSO Six official websites to know if you’re planning to work in France

Certain countries have specific ‘seasonal worker’ visas on offer, for certain sectors which allows – for example – Canadians to come to France and work the ski season. 

Cash-in-hand jobs

Certain sectors which have a lot of casual workers – for example seasonal fruit-picking – do have cash-in-hand jobs, known in France as marché noir (black market) or simply travail au black (working on the black, or working illegally). 

This is of course illegal and working this way carries risks – as well as the possibility of losing your job if labour inspectors turn up you are also in a vulnerable position. If your employer suddenly decides not to pay you, or make unexpected deductions from your wages, there is very little you can do about it since you won’t have any kind of work contract. 

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