Pernod Ricard and Rémy Cointreau led declines in French beverage stocks after China signaled potential retaliatory tariffs on EU wines and spirits. The move follows France’s push for a 30% EU tariff on Chinese imports or euro devaluation to counter trade imbalances, detailed in a government strategy paper Monday.

France’s wine and spirits exports fell to their lowest volume in over 20 years, with shipments to China dropping sharply. A CCTV-linked social media account warned Beijing could impose "reciprocal tariffs" if Europe proceeds with new trade barriers. China already launched anti-dumping probes against European brandy producers in January.

The stakes are high for French cognac, with China accounting for nearly half of global exports. Shares in Pernod Ricard fell 1.75%, while Rémy Cointreau dropped 0.88% Wednesday. The sector faces mounting pressure as geopolitical tensions reshape alcohol trade flows between Europe’s luxury producers and Asia’s key markets.