FRANCE: Cognac dip will be short-lived - Courvoisier MD
A slip in Cognac sales in the global economic downturn will not turn into a long-term trend, the head of Courvoisier has told just-drinks.
Cognac sales are down 14% by volume year-on-year, hit by destocking and lower consumer spend in key markets, Jean Marc Olivier, outgoing MD and master blender at Courvoisier told just-drinks today (10 September).
But, he said that industry-wide sales will recover once economies around the world rebound.
"We know it's a cycle. When the economy was doing fantastic, we grew well, but we know that when the economy goes into decline then, of course, we also have to decline a little bit," said Olivier, who is shortly to hand over the reins at Courvoisier to Patrice Pinet.
Commenting on a decline in Cognac demand in 2009, Olivier said the situation "is not a disaster".
On Courvoisier, which is owned by Beam Global Spirits & Wine, he added: "Our business continues to grow in emerging markets, such as Asia, Russia and South America."
Olivier's analysis of the downturn is in-line with market analyst group Sanford C Bernstein.
Trevor Stirling, Bernstein analyst, said this week: "We believe that the key investment controversy for the next few years is: will industry volumes fall for a decade (like Japan in the 90s) or bounce-back (as in the 70s)? We are in the latter camp."
He added: "We are cautious on the prospects for the US because we expect premiumisation to be slow to return in the US. But, we are positive on the prospects for China and optimistic that a concentrated industry structure means that pricing will stay relatively firm."
Olivier, who is in London this week for the launch of luxury Cognac L'Essence de Courvoisier, will continue to work as a consultant with Courvoisier and will retain a seat on the company's blending committee.
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