Shares in leading French makers of spirits plunged on Friday in wake of a Chinese investigation.
Remy Cointreau
RCO,
shares plunged 11% and Pernod Ricard stock
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, but
worst 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
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.
