Cognac and armagnac producers are hoping for a swift resolution to China’s prolonged anti-dumping inquiry into European Union (EU) brandy this month. The Chinese government has been investigating since January last year whether French brandy is being sold in China at artificially low prices. This case, part of a broader trade dispute between the EU and China over tariffs on Chinese electric vehicles, has resulted in brandy imports facing substantial security deposit requirements.
The impact has been significant, particularly for sales in China’s mainland duty free sector, including the critical holiday island market of Hainan. Since December, Chinese duty free retailers have been unable to replenish their stock of cognac or armagnac, a restriction that extended through the lucrative Chinese New Year period – traditionally a peak season for international travel and luxury gift-giving.
“Products currently on shelves or in the stockrooms can still be sold to travellers, but the transfer of stock from bonded warehouses to the stores is no longer possible,” explains a spokesperson for a leading Cognac house, who requested anonymity. “In effect, duty free operators can no longer clear Customs for cognac products.”
A decision on the inquiry may come as early as this month. Until then, cognac producers remain in limbo, temporarily shut out of one of their most vital travel retail markets. Alongside Chinese baijiu and Scotch whisky, cognac has long been a cornerstone of Chinese duty free sales. Post-pandemic, major houses have made significant investments in Hainan, where sales had been booming.
Despite these challenges, business continues. Moët Hennessy Travel Retail reaffirmed its commitment to the region in January with a high-profile visit by Maurice Hennessy, an eighth-generation member of the Hennessy family, to Hong Kong – where duty free supply chains remain unaffected. During his visit, he attended a VIP dinner with CDF-Lagardère, the duty free concessionaire at Hong Kong International Airport, and participated in a Chinese New Year Hennessy activation at the airport.
Campaign themes
Further bolstering its presence, Hennessy launched an immersive Lunar New Year campaign across the Asia Pacific region. The centrepiece of this initiative was a collaboration with celebrated Chinese fashion designer Shuting Qiu, who reimagined Hennessy’s limited-edition bottles with bold colours, intricate embroidery, and abstract snake motifs. Dubbed the Reimagination collection, the campaign emphasised themes of renewal and transformation, with sustainable packaging reinforcing Hennessy’s commitment to eco-conscious luxury. Qiu’s exclusive designs adorned key Hennessy expressions, including Hennessy VSOP, XO and Paradis.
To support the launch, Moët Hennessy Travel Retail orchestrated high-profile activations at major locations across the region, including Singapore, Hong Kong, Macau, Taiwan and key airports in Australia and New Zealand. These pop-ups featured interactive experiences such as personalised Hennessy Travel ID cards, photobooths, and local gourmet pairings, enhancing the festive shopping experience.
Beyond cognac, Moët Hennessy Travel Retail continues to expand its luxury footprint. The company recently unveiled its first Les Caves de Champagne retail spaces at Istanbul Airport, a major global aviation hub, in partnership with Heinemann Travel Retail and Unifree Duty Free. Designed to evoke the famous chalk cellars of Reims, these boutiques showcase premium cuvées from Moët & Chandon, Ruinart, Dom Pérignon, Veuve Clicquot and Armand de Brignac.
Highlighting the growing role of digital engagement in duty free, the new shop-in-shops feature a Champagne Finder app, designed to help customers find their ideal bottle. Additionally, travellers can personalise their purchases, making them ideal gifts for friends and family.
“Les Caves de Champagne is the result of more than two years of planning and a strong partnership,” says Manuel Schilling, head of spirits buying at Gebr Heinemann. “Featuring a spectacular assortment, including one of the most expensive Dom Pérignon cuvées in the world and exclusive champagnes, it sets a new benchmark for exclusivity and innovation.”
Moët Hennessy Travel Retail is not alone in recognising Istanbul Airport’s growing significance. Last year, The Edrington Group opened a shop-in-shop dedicated to The Macallan and Highland Park single malts. With passenger numbers growing over 5% to reach 80.1 million in 2024, Istanbul has become an increasingly strategic location for brands that appeal to high-spending Asian and Russian travellers.
Heinemann, which operates Istanbul’s duty free concession through a joint venture with local partners, identified the airport as its standout location in 2023, generating over €1bn in turnover – a figure likely matched or surpassed last year. In a period of geopolitical uncertainty, when parts of the travel retail industry face significant headwinds, thriving global hubs such as Istanbul provide vital growth opportunities.
As cognac producers await clarity on the Chinese market, their resilience and adaptability will be tested. Whether through immersive brand experiences, strategic partnerships, or expansion into emerging travel hubs like Istanbul, luxury drinks brands are proving that, even in uncertain times, innovation remains key to staying ahead.
