French spirits group Pernod Ricard expects sales to improve gradually this financial year in its main market of the US and in Europe, but said China, where sales fell 9 percent in the past three months, remained difficult. The world’s second-biggest spirits group behind Britain’s Diageo Plc said a resilient Europe and robust sales in the US where Jameson whiskey did well helped it achieve a 3 percent rise in underlying sales for the first quarter to the end of September, beating market expectations. The owner of Mumm champagne, Absolut vodka and Ballantine’s whisky said sales in China, which makes up 9 percent of group sales, were hit by wholesaler de-stocking and a slowdown in the less expensive Noblige cognac…Full Article: The Global Times Oct 2015

Key Point

  • In October 2015, LVMH’s Moet Hennessy spirits division stated that Chinese demand for their cognac has improved slightly.

ChinaAg Comments

  • In 2014, Hong Kong imported 4.8 million liters of brandy/cognac and exported 1.9 million liters to mainland China, equating to a 40% re-export rate. From 2010 to 2014, total re-export volumes averaged 43% of all imports. The top supplier of course was France, while Singapore was a strong secondary supplier. However, nearly all of Singapore’s supply originated from France, meaning that a fair amount of French cognac was re-exported twice (by Singapore and Hong Kong) before reaching the mainland. In 2014, Hong Kong brandy/cognac imports were valued at US$215 million.
  • In November 2012, China launched an austerity/anti-corruption campaign that has had a dampening effect on the consumption of high-end liquors within China.

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