The cognac crisis and the slump in champagne sales are shaking up LVMH, the industry leader. The luxury giant, keen to cut costs, announced plans to eventually cut 1,200 jobs at its subsidiary Moët Hennessy, which includes its wine and spirits activities – more than 12% of its workforce, estimated at 9,400 employees. The plan was announced in a message to employees on Wednesday, April 30, first reported by La Lettre. According to management, these job cuts will be made without a redundancy plan, relying on not replacing those who leave.

It is a serious blow to an industry that was breaking records, driven by the success of cognac in both China and the United States. LVMH had advocated for the rapid development of vineyards in Charente, southwestern France, in light of its forecasts for continuous sales growth. But in 2022, the first signs of slowdown appeared, followed by a sharp deceleration in export growth in these two key markets after the shock of the Covid-19 crisis and subsequent inflation, coupled with Beijing's desire to tax imports.

The dispute with China began in January 2024, when Beijing opened an anti-dumping investigation into European exports of wine-based spirits, primarily affecting cognac. The move was a retaliatory measure against Brussels' decision to tax Chinese car imports into Europe. The threat materialized in October with the requirement for importers of European brandy to provide a security deposit or bank guarantee to Chinese customs, representing 34% to 39% of the merchandise.

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