Decline in Far East and Europe hits global Cognac sales but US rallies

By Richard Siddle

Published: 12 September, 2014

The clampdown on luxury goods gifting in China continues to hit the global spirits industry with Cognac announcing total exports are down both in volume and value for the year to July 2014.

Overall sales to the Far East were down 20.9% in volume and 19.1% in value between August 2013 and July 2014, according to the latest figures from the BNIC (Bureau National Interprofessionel du Cognac.

The region, however, still represents close to a billion euros in sales with 49.2 million bottles exported.

European sales have also been hit in the last year with a decline of 4.7% in volume and 11.7% in value, with total number of bottles exported now sitting at 41 million. Eastern Europe, however, is in growth up 4.4% in volume.

Overall Cognac exports fell by 6.7% in volume and 10.2% in value from August 1 2013 to July 31 2014.

Total bottles exported were 155.5 million, which is the equivalent to 435,358 hectolitres of pure alcohol with a total market value of 2.2 billion euros.

The US remains bouyant as sales are hit in Far East and traditional European markets

North America, however, enjoyed a 6% rise in volume and 3% in value, with particularly strong growth in the US, further cementing its position as Cognac's number one export market. The US is now importing a total of 54.1 million bottles a year.

Other strong performing countries for Cognac include "sub-Saharan Africa" which was up 16.9% in volume and 20.1% in value (driven predominately by South Africa and Nigeria).

VS (Very Special) Cognac is up 3.1% in volume and 1.8% in value, largely focused on US sales.

But VSOP (Very Superior Old Pale) Cognac and older quality categories were down 13.3% in volume and 16.9% in value.

Distribution of Cognac around the world reveals North America has a 36.4% share, the Far East 31.6% and Europe (26.4%).

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