Sales of VSOP Cognac drop sharply in past year

Global sales of VSOP and older quality Cognac categories saw significant double-digit declines in 2013/14, with only the VS category showing signs of growth.

Sales of VSOP and above Coganc fell sharply in 2013/14, the BNIC has revealed

According to data released by the Bureau National Interprofessionnel du Cognac (BNIC), sales VSOP and above Cognacs plummeted 13.3% by volume and 16.9% by value in the 12 months to July 2014.

However, the VS category was described as “on the rise”, increasing 3.1% in volume and 1.8% in value due to solid sales in the US.

Overall, the BNIC reports that global Cognac shipments dropped 10.2% by value and 6.7% by volume in the year.

This downturn has been attributed to a steep decline in the Asian market, where 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 as the Chinese government continues its crackdown on excessive spending and gifting.

The BNIC claims that this sharp fall has come after three years of solid growth for category.

However, the organisation said Cognac “remains a significant contributor to France’s wine and spirits export sector”, shipping 155.5 million bottles in the year “despite a complex global backdrop”.

In particular, Cognac exports to North America saw a 6% uplift in volume and a 3% value increase due to “some outstanding results” in the US, where 54.1 million bottles were shipped.

Sub-Saharan Africa also proved to be a promising market for Cognac in 2013/14 when exports to the region grew 16.9% by volume and 20.1% by value.

Europe, however, saw some disappointing results, with a 4.7% volume decline and 11.7% value decline due to the global economic slowdown, while Eastern Europe saw a 4.4% volume increase.

“Cognac benefits from a strong position in global markets and is supported by famous, well known brands, all of which helps to ensure it has a firm and lasting foothold in its key markets,” a statement from the BNIC said.

“Those who work in the Cognac industry remain optimistic and confident in the development of the category and continue with their strategy of investment and development – both at home in the vineyards as well as in international markets.”

Earlier this week, the Federation of Wine and Spirit Exporters reported that exports of French spirits and wine dropped 7.3% to €4.8 billion in the first six months of this year, while exports to China fell almost 30%.

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