Will cognac suffer from the new Chinese Customs policy ?
China is already the main market for many Cognac houses. So they all are worried about the new implementation of Chinese customs when it comes to alcohols. Some Cognac have been blocked at the border by Chinese customs. They were held or returned to France.
The roots of this new regulation
It’s due to the issue of the level of phthalates in imported products.
.Phthalates are chemicals used to increase their flexibility of plastics. The use of phtalates in agriculture has been banned in many countries considering some risks in term of health.
But why is this of any concern for Cognac ? Well, the fact is that last November Chinese authorities discovered extremely high levels of phthalates in Baijiu (a traditional Chinese rice alcohol). Then new rules were adopted.
Camus and Remy Martin were among the Cognac brands that have seen their shipments stopped by Chinese customs.
How is it possible to found phthalates in Cognac ?
It is due to the manufacturing process of Cognac. Indeed the liquid base for Cognac has to pass threw metal vessels. The liquid is transferred from one vessel to another through pipes. And some companies use pipes that contain phthalates.
As Cognac is corrosive it can sometimes breaks the molecules of phthalates that are in the pipes. These laters will be transfered into the liquid.
This new regulation represent a tremendous issue for the cognac industry.
First, in order to adapt to such a regulation all the pipes containing phthalate will have to be replaced. This will cost a lot.
Then it will require a constant quality control of the new product. This also will cause additional costs for the cognac producers.
Last but not least for the very old XO it will be merely impossible to control the level of phthalates.
Take a step back, sometimes, problems will find you. Like what has happened in dairy industry, competitors sometimes even made up some rumors to destroy the reputation of the others. With the help of magic internet, those rumors can spread so fast and widely that everybody regards them as real news. Thus, even the rumors are proven wrong, the sales of those brands have been already undermined.
Now, rumor spread online has been proven as the major menace to company reputation now in China. The best solutions to tackle the problem is to prepare the solutions and reactions in advance. In the meantime, keep good relationship with media in case of the disaster of public reputation crushed.