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Hennessy Cognac continues to suffer in China
The drinks unit of LVMH, producer of Glenmorangie Scotch whisky, has seen its profits and sales drop in the first half of 2014 as the group continues its de-stocking efforts in China.
LVMH continues to suffer from China’s beleaguered Cognac market in the first half of 201k
French luxury goods provider Louis Vuitton Moët Hennessy reported yesterday that its wine and spirits revenues fell 7% in the first half of the financial year, while its profits also plummeted 15% to €461 million.
The group, which also owns Belvedere vodka and Ardbeg Scotch whisky, blamed the decline on the dramatic slowdown in the Cognac market in China, which has been adversely affected by the country’s crackdown on luxury spending and gifting among government officials.
Distributors of LVMH’s flagship Cognac brand Hennessy pushed ahead with their destocking strategies in the country throughout the second quarter.
A statement from the group read: “In an environment characterized by persistent uncertainty in Europe, the US market continued to enjoy good dynamics.
“The business group remained focused on its value strategy: firm pricing policy and strong innovation accompanied by sustained investments in brand communications and in developing its production capacity.”
Overall, LVMH, which also owns high-end fashion label Louis Vuitton, recorded sales of €14 billion.