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Le Monde
Le Monde
17 Feb 2024

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The Chinese have just celebrated New Year, but it's still too early to say whether the Year of the Dragon will be good for cognac sales, a prized spirit in China. The flow of the precious French brandy will be closely scrutinized, as it contributes to France's trade surplus. In 2023, however, it fell back slightly. Logically, cognac has therefore driven down total wine and spirits exports. According to data published by the French Federation of Wine and Spirits Exporters (FEVS) on Tuesday, February 13, sales of French spirits abroad reached €16.2 billion, down 5.9% year-on-year.

"A form of soft landing compared to the record figures of 2021 and 2022," said Gabriel Picard, FEVS president. He pointed out, however, that "despite this 5.9% decline, 2023 marks the industry's second-best performance ever," and reminded us that "wines and spirits maintain their position as the third-largest contributor to the balance of trade surplus." The balance of trade amounted to €14.8 billion in 2023, down 5.8%.

Cognac was the biggest loser. Exports of the Charentais brandy plunged in value by almost 15% to €3.35 billion. The slowdown already perceptible during 2022 became more pronounced in 2023. Cognac was initially penalized by the slowdown in the Chinese market, affected by the zero-Covid policy. Although bars reopened in China, the euphoria of a return to normal life faded by summer, against a backdrop of economic anxiety.

Falling sales in the US

Above all, the bad surprise came from the US. Sales of spirits fell sharply by 37% across the Atlantic in 2023, to €1.47 billion. "Most of the downturn in French alcohol exports can be explained by the decline in the American market," said Picard. "There was an inventory adjustment effect after two years of record shipments."

Americans flocked to cognac during the Covid-19 pandemic, creating supply tensions and price inflation that subsequently prompted them to turn to other products. Sales of French wine, particularly champagne, also suffered from this situation, but to a lesser extent, posting a 7.8% decline to €3.1 billion. Even though shipments across the Atlantic suffered a sudden downturn, the US remains by far the leading export country for French spirits. They account for 22.4% of total sales, ahead of the UK (10.4%), China (7.4%) and Singapore (6.9%).

While the drop in sales, seen as a form of normalization after two more than flourishing years, does not give rise to any particular concern, the trend in volumes of alcohol shipped is being followed even more closely. These fell by 10.4% to 174.5 million cases. The steepest fall was in cognac. According to the National Interprofessional Cognac Office, the number of bottles sold fell in one year from 212 to 165 million.

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