GLOBAL: China reverse hits Cognac - research
The new just-drinks/The IWSR Cognac report has launched this week
Global shipments of Cognac fell by 3.2% in 2013 to 12.3m nine-litre cases, hit by a slowdown in the hitherto fast-growing Chinese market, according to a new, joint just-drinks/The IWSR report.
Having grown by some 800,000 cases since 2009, the Chinese market went into reverse last year, with shipments down by 11.2% to 2.4m cases, as a result of the Government crackdown on luxury consumption. The slowdown in China was partly responsible for North America regaining leadership over Asia as Cognac's largest market in volume terms.
Domestic volumes in the Americas currently stand at around 3.95m cases, representing 32% of total Cognac volumes, with Asian shipments now at 3.57m cases, around 28% of global shipments. When Travel Retail is included, however, then Asia remains the largest region.
The downturn in China has also affected other Asian markets, the report highlights, with volumes in Vietnam and Hong Kong falling and growth slowing in Taiwan. However, the report adds that both Vietnam and Malaysia still look "promising for the future".
The long-term decline in Japan continued, although the decline has slowed. Shipments fell last year by 3.3%, but that was a marked improvement on the compound annual growth rate (CAGR) between 2009 and 2013 of -6%.
There was more bad news for Cognac's performance in Europe, which has declined by 1m cases over the last decade. The report states that there was "little sign of improvement", with European shipments down last year by 7.5% to 2.45m cases.
The biggest declines have been seen in Cognac's main European markets, namely the UK, Germany and France. This pattern continued last year, with all three markets shrinking further. Sales in Germany fell by as much as 17.2% to 365,000 cases.
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