Here at Cognac Expert we’ve been following the rumblings over the past weeks about the concerns about a shortage of raw eaux-de-vie, and the need for an expansion of Cognac vineyards.
We’ve heard from the head of the biggest of all houses – Hennessy – and we’ve heard from the BNIC, who have just announced the maximum per hectare yield allowance. It’s up 13.7 per cent this year, to 10.83 hectolitres. And now it’s the turn of the UGVC (l’Union Générale des Viticulteurs de Cognac) to come out with their thoughts on the subject.
Both the president, Christophe Forte and general secretary, Stephane Roy are quite plain as to the stance taken by the union. Whilst they are, naturally, positive about the long term future of cognac sales, they do raise some questions about various suggested strategies.
They fear that companies such as Martell, for whom 50 per cent of their sales are in a single country – China – are, once again, putting all their eggs in one basket. This is understandable, as after the boom and bust of the Japanese market some years back the union in naturally cautious when they see this possibility once again rearing its ugly head. The union is calling for caution and the importance of a balanced growth.
Also discussed was the factor of the smaller cognac houses being squeezed out of the market. It’s all very well that the cognac giants can buy up all stocks of eaux-de-vie, but the smaller houses must also be allowed to survive. This can be ensured by contractual agreements, even during times of a downturn.
The third point raised was the low level of raw eaux-de-vie being stored. In 2006, 38 per cent of all produced went into storage. Today that figure’s dropped to 25 per cent. And even that might not really be a true figure, as how much of that is really available for purchase? Forget and Roy say this is a difficult question to answer, but perhaps the truer figure might be closer to 10 or 15 per cent.
And this is the reason why the unions are asking that the management of the stocks and reserves of cognacs are frozen this year. They also spoke about the importance of a controlled increase in vineyard expansion. Or rather, the re-introduction of old vineyards that one produced healthy and viable fruits. This will help the growers to improve their performance, yield and provide a solution to many of the challenges that the cognac industry is currently facing.
Sources: www.sudouest.fr, www.lavigne-mag.fr