Global Cognac sales plummet 10% as China bites

Global sales of Cognac plummeted 10.2% by value in 2013/14 as China continued its austerity measures among government officials.

Worldwide sales of Cognac have experienced a steep decline due to China’s long-running anti-extravagance campaign

According to data released by the Bureau National Interprofessionnel du Cognac (BNIC), in the 12 months from July 2013, Cognac shipments also dropped 6.7% by volume.

The BNIC claims that this sharp fall has come after three years of solid growth for category as China advances its crackdown on extravagant spending and gifiting within the government and military in order to combat corruption claims.

Citing BNIC data, The Wall Street Journal reports that exports of Cognac to the Far East region, including China, South East Asia and Japan, fell by around 20% in both volume and value in the past year.

The slowdown of the Cognac market in China has been keenly felt by key drinks producers, including Rémy Cointreau, Pernod Ricard and Louis Vuitton Moet Hennessy (LVMH).

Announcing its full-year financial results in April, French drinks group Rémy Cointreau, producer of Rémy Martin Cognac, revealed that China’s austerity measures had caused its net profits to plunge almost 50%.

Meanwhile, Pernod Ricard, maker of Martell Cognac, also saw its sales slide 7% and the drinks arm of LVMH, producer of Hennessy Cognac, saw its profits drop by 15%.