Remy Cointreaus Remy Martin Cognac brand has faced challenges in China

Remy Cointreau's Remy Martin Cognac brand has faced challenges in China

Remy Cointreau has played down its Chinese New Year performance, despite signalling a "clear improvement" in Greater China.

Luca Moratta said yesterday Chinese New Year was "good... but not terrific" for the group across Greater China, with positive volume depletions for the Remy Martin brand owner over the New Year period, despite flat sales in value terms.

Volume depletions in the fiscal full-year, the 12 months to the end of March, were up by mid-single digits in the region, which includes mainland China, Taiwan, Hong Kong and Macau. Value depletions were flat for the 12-month period.

"This implies a clear improvement in consumption trends since last summer," Moratta said.

The CFO said the trends were positive for the future but declined to comment on whether they meant that the Cognac sector is back on track in China, where anti-austerity measures have hit consumption in the past two years. 

"We cannot be 100% bullish that the trends of the last quarter can be applied to Greater China [in the quarters] to come," Moratta said, adding that the company would be able to give more precise details at its next results presentation in June.

Moratta said Remy Martin Club Cognac was driving performance in Asia, with full-year volume depletions up double digits. Meanwhile, the Qualité Supérieure Supérieure (QSS) range reached "stability".

South-East Asia was "solid", according to the CFO, but he said the Travel Retail channel across Asia was weak for the 12 months as spend per capita declined "significantly".

The Cognac category has struggled in China over the past two years, after Government anti-extravagance measures clamped down on gifting and large-scale banquets among officials. Since the start of this year, however, producers have shown signs of a turnaround. In January, Remy posted a flat Q3 in China, leading analysts to suggest sales had finally bottomed out and that a rebound is on the way. Moët Hennessy also posted a bounce-back in China sales in February.

Pernod Ricard was more cautious after its first-half results in February, but CEO Alex Ricard said he was looking forward to seeing how the company performed over Chinese New Year.

Last week, the Bureau National du Cognac released new figures that showed Cognac export volumes to East Asia jumped 7% in the 12 months to March.

In the same week, LVMH CEO Jean-Jacques Guiony, whose company owns Moët Hennessy, said VSOP sales by retailers over Chinese New Year were up by mid-single digits while XO "was better than that"