LVMH latest to be hit by China clampdown

French luxury goods company LVMH has once again seen its spirits and wine sales slip as a result of China’s continuing campaign of austerity.

LVMH has seen its wine and spirits sales slide in the first quarter of 2014 due to China’s clampdown on excessive spending

Reported sales of Möet Hennessy, the group’s drinks arm which includes Glenmorangie Scotch and Hennessy Cognac, declined 8% in the first quarter of 2014 to €888 million.

This decline was attributed by the group to a destocking of its high end Cognac in China, a result of the government’s clampdown on conspicuous spending and gifting among officials in order to counter claims of corruption.

Rival companies Diageo, Remy Cointreau and Pernod Ricard have all admitted to suffering affects of the measure.

However, LVMH also said that its Cognac portfolio had proved “resilient” in the quarter thanks to its “dynamic presence” in certain segments of the Chinese market and its “solid growth” in the US.

The group also reported “good growth in volumes” for its Glenmorangie Scotch and Belvedere vodka brands.

Overall, LVMH reported 4% increase in first quarter 2014 revenue to €7.2 billion.