The spirits arm of LVMH declined by 11% in the first nine months of 2024 as demand for Hennessy Cognac remained weak in China.
Paris-headquartered LVMH reported that its ‘Cognac & spirits’ division saw nine-month sales drop by 11% organically to €2.05 billion (US$2.23bn), while the Champagne and wine arm fell by 6% to €2.14bn (US$2.33bn).
Total wine and spirits sales dropped by 8% for the first nine months of this year. Looking at the third quarter (July-September), wine and spirits sales fell by 7%, following a 5% decrease in the second quarter and a 12% drop in the first three months of 2024.
LVMH noted that Hennessy saw ‘weak demand and prudence among retailers in China’, however it noted that the brand returned to growth in the US during the second quarter.
In August, LVMH’s wine and spirits division, Moët Hennessy, teamed up with Beyoncé Knowles-Carter to create American whiskey brand SirDavis.
LVMH’s perfumes and cosmetics arm and ‘selective retailing’ were the only parts of the business to post organic growth. Wine and spirits registered the biggest decline of all divisions.
The company’s total revenue was flat at €60.8 billion (US$62.2bn) for the first nine months of 2024.
In its outlook, the group said it would focus on ‘continuously enhancing the desirability of its brands, drawing on the authenticity and quality of its products, excellence in distribution and agile organisation’.
LVMH also owns Belvedere Vodka, Volcan de mi Tierra Tequila and Scotch brands Ardbeg and Glenmorangie.
Moët Hennessy recently promoted Julie Nollet to the role of managing director for the UK and Ireland.
GlobalData warned that duties on imports of EU brandy could “drastically” decrease the competitiveness of the category in China.
The tariffs could have a “significant” effect on leaders in the category such as French firms Rémy Cointreau, LVMH, and Pernod Ricard, which produces Martell Cognac.
