French spirits sales and exports have dropped sharply this year as consumers continued to cut back on spending in the face of cost of living worries.
The news was reported by an industry lobby on Thursday, which warned that looming trade barriers could further hurt the sector.
‘Deeply Worried’
Cognac makers said on Wednesday they were ‘deeply’ worried about an anti-dumping probe launched by Beijing in January.
The probe came after the European Commission imposed tariffs on imports of Chinese electric vehicles.
Total spirits exports dropped 13% in volume last year to 406 million litres and 12% in value to €4.8 billion.
Sales in the US collapsed 36% in value and 35% in volume in the same period, according to the Federation Fracncaise des Spiritueux (FFS).
Cognac exports, which account for 70% of total French spirits exported, plunged 21% in volume in 2023.
China accounted for 19.4% of cognac exports in 2023, according to producers.
In a statement, FFS said, ‘The consequences of inflation in third countries are now giving way to ongoing trade conflicts whose resolution is threatened.
The body cited the US with its uncertain presidential elections and China’s anti-dumping investigation.
Shares
Remy Cointreau’s shares, which earn significant revenue in the Asian market, were down more than 6% on Thursday, reaching their lowest level in seven years.
Shares in Pernod Ricard were also lower, although to a lesser extent.
FFS said that in 2024, two thirds of spirits exports in value were being shipped to high-risk markets.
Alcohol demand in France has fallen sharply in recent years, falling 60% over 60 years.
FFS added that spirits sales in major outlets fell 10% since 2020 and 4.3% in 2023.
It said, “The first months of 2024 leave an even more bitter taste: the decline in volumes is around 5% compared to the previous year and marks an accelerating downward trend.”
Some types of spirits used in cocktails, such as gin, were spared.
However, digestives collapsed, with whiskeys falling 6.4% and rums 3.8%.
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