Remy Cointreau, Pernod Ricard shares hit by China probe of EU brandy

By Steve Goldstein

Shares in leading French makers of spirits plunged on Friday in wake of a Chinese investigation.

Remy Cointreau (FR:RCO) shares plunged 11% and Pernod Ricard stock (FR:RI) fell 5%, after China launched an anti-dumping investigation into brandy imported from the European Union.

According to JPMorgan, Remy generates about 30% of its profit from China, and Pernod generates about 20%.

"Limited info on what the results from such actions could be, butworst case scenario could be of increased tariffs on all EU Brandy, which could result in lower volumes and/or margins in the region," said Olivia Petronilho of JPMorgan in a note.

LVMH Moet Hennessy (FR:MC), whose wine and spirits account for about a tenth of its revenue, saw its stock fall by 2%.

The announcement by China follows the EU probe into China's electric vehicle makers.

The China Ministry of Commerce said it was responding to a complaint made by the domestic brandy industry.

-Steve Goldstein

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01-05-24 0703ET

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