Nicholas Faith spies bright Cognac future despite China dip

30 October, 2013

Nicholas faith has said Cognac producers “have it made” and needn’t worry about the apparent slowdown of sales in China, the world’s top destination for the French spirit.

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.”

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