This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
China’s slowing Cognac market ‘will correct itself’
The slowdown of the Cognac market in China “will correct itself” and producers “should not be too worried”, Alexandre Gabriel, president of Cognac Ferrand has predicted.
Alexandre Gabriel, president of Cognac Ferrand, has asserted his confidence that China’s slowing Cognac market will “correct itself”
Speaking at a tasting of the company’s Plantation Rum collection in London yesterday, Ferrand told The Spirits Business that despite the current challenges presented by China’s crackdown on luxury spending and gifting, the future looked bright for the Cognac market and producers should endeavour to cater for future demand.
The Chinese government has embarked on a campaign of austerity since late 2012, admonishing luxury gift-giving and hedonistic banqueting among politicians and military officials in a bid to counter widespread claims of corruption.
As increasing numbers of Chinese consumers adhere to this message, Cognac and high-end Scotch producers have seen their profits plummet, including Rémy Cointreau and Pernod Ricard.
But for Gabriel, this struggle is “temporary” and he is confident the market will “bounce back”, emphasising a need for producers to cater for future demand.
“The industry has always been cyclical and the hardest thing is to try to predict future demand,” he said.
“It’s very difficult to understand what consumer demand will be like in 20 years time, but we have to bear this in mind. No-one could have predicted the Cognac boom in China in the 80s, just as no-one could have predicted its recent decline.
“But the good part is that life runs in cycles, and some producers might have overstock for a while, but demand will rise again. You can see it happening clearly in China at the moment, but I am certain the market will correct itself. I am not worried.”
Speaking of Cognac Ferrand’s Plantation Rum collection, Gabriel said that the company had some “exciting ideas in the pipeline” with one “secret project” to be unveiled at this year’s Tales of the Cocktail in New Orleans.
As reported earlier this month, the Bureau National Interprofessionnel du Cognac (BNIC) claimed that global Cognac sales were “reassuringly high” despite the slowdown in China.