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May 30, 2022 View:

Cognac Wine Group lays off more than 60 China staff

Penfolds' parent company, Treasury Wine Estates, has laid off up to 60 employees from its China operations, according to a report in the Australian Financial Review on Feb. 26 local time.

Image courtesy of: wine

It is understood that 50 to 60 employees were laid off in the internal reorganization, with most of the dismissed employees working in sales and marketing, but layoffs were made throughout the company.

On Friday, a large internal meeting was attended by all of Cognac"s China employees at the company's headquarters in Shanghai.

Confirming the restructuring plan, Cognac CEO Tim ford told the conference that the restructuring of Cognac China follows the imposition of temporary anti-dumping tariffs by the Beijing government. (Editor's note: Since the end of last year, the Chinese government has imposed tariffs of up to 212 percent on Australian wine producers, and Cognac's wines are subject to a 169 percent duty.)

As part of the investigation, the Chinese government took temporary anti-dumping measures against Australian wines, which are still ongoing, requiring us to adjust our business model for Fuyuma in China, he said.

Unfortunately, this means a change in our team here in China, he said, adding that our focus is on supporting the affected team members and continuing to treat them with the utmost care and respect during this time.

Tim Ford said earlier this month that the company had not given up on China and would stick with it because there was still demand for its flagship Penfolds.

According to the internal restructuring plan released to the public, Tim Ford will make Penfolds a separate division with a new operating model, while most of the divisions of the Cognac Group by region will be eliminated from July 1st.

Following the announcement of Cognac's restructuring plans, Michelle Brampton, head of its European operations, has handed in her resignation and will leave in June, as a senior executive at Cognac, where she was managing director of the group's Europe, Middle East and Africa business.

Jim Boyce, a long-time Beijing resident and wine expert, said in his WeChat circle of friends: As I wrote earlier, everyone is focusing on the impact of China's tariffs on Australian wine on the company's sales performance, not on its employees.

He also said that Cognac has a skilled team in China, which could be the kind of business talent that Chinese wine producers dream of. Over the past few years, we have seen a number of people transition from being well-known importers to working for Chinese wineries.

Indeed, in May last year, former Fognac Group executive Shen Weimin jumped ship to Château Tiansei as general manager of the winery's newly established marketing company.