The veteran Cognac commentator - who was speaking at The London Cognac Summit today to promote his new book, a revision of his 1986 classic, Cognac - likened producers to “manic depressives” in the way they have reacted to China’s sales fluctuations.
He said: “Cognac was very manic about China [when it was booming] but now [it is not, the region] is manically depressed. There has been overstocking [among buyers causing a slowdown] in China but the habit of Cognac drinking is now ingrained with a lot of people.”
Faith said that the ban on gifting among government officials had had an effect on high-end Cognac sales but that the issue was far from a knockout blow. “Cognac is established – and not just in the $1,000 a shot [bars and restaurants] and banquets. There are increasing sales of VSOP which means average Chinese can afford a bottle.”
For the year ending July 31 2013 Cognac volumes were down 1.8% in China and down 1.1% across the category – that in contrast with growth of 4.3% in the same period the previous year.
Many of the region’s larger producers have talked of a slowdown in demand and are now bracing themselves for the Christmas and Chinese New Year period, which will likely define their year.
In a speech that recalled how the region had changed over the near-30 years since his original book, Faith said producers’ concern was also predicated on their experience of the decline of the Japanese market, 20 years ago.
He said: “In 1990 the great Japanese boom stopped [at a time] Cognac producers had come to rely a lot on Japan [as a market] for its best Cognac.”