China slowdown hits French spirits exports

Exports of French spirits have dropped sharply in the first six months of this year as the market slowdown in China continues to bite.

Shipments of French spirits such as Cognac have continued to decline in 2014 amid China’s ongoing austerity measures

According to data released by the Federation of Wine and Spirit Exporters, exports of French spirits and wine dropped 7.3% to €4.8 billion while exports to China fell almost 30%.

In particular, global exports of French spirits declined 7%, hampered by the poor performance of Cognac in its key Chinese market. Exports of Cognac itself, which account for two thirds of French spirit shipments, fell 12% in value in the first half of the year.

This is a substantially stepper decline than in 2013, when shipment volumes of French spirits fell by 3.9% value exports fell by just 1.1%.

French drinks companies and Cognac producers such as Rémy Cointreau and Pernod Ricard have seen their sales plummet over the past year amid an on-going slowdown in the Chinese market.

Rémy Cointreau, producer of Rémy Martin, saw its profits almost halve in 2013/14 while Pernod Ricard, owner of Martell Cognac, experienced double-digit profit decline in the year.

The Chinese government announced at the end of 2012 that it would be cracking down on excessive spending and gifting among politicians and military officials in order to counter claims of corruption.

However, international drinks groups such as Pernod Ricard and Diageo have predicted the market will improve in the near future.