China cuts back on French luxury items
France is feeling the pinch of a decline in demand of cognac from China, its largest importer. Worldwide sales of the brandy during the past year fell with 6.7 percent by volume and 10.2 percent by value, the National Inter-professional Bureau of Cognac (BNIC) said on Tuesday.
Since an anti-corruption drive at the end of 2012, the Chinese have cut back on expensive value-added products. This has put a damper on the consumption of high-end products like cognac.
But China has also built up its own stocks by local retailers, which has further contributed to a slow-down in exports of the French product.
According to BNIC exports of cognac to the Far East dropped by about one-fifth in the past year.
Cognac is often used in a toast in China when the signing of business deals is concluded.
The French luxury product Hermès has also suffered from China’s loss in appetite for extravagant business entertainment and gift-giving. The company known for its expensive silk scarves and handbags reported that sales slowed in the second quarter of the year.
Despite the slowdown from China, cognac is doing well in North America, where volume rose 6.0 percent, mainly with strong sales to the United States.
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