December 28th saw Fredric Larsen, of Larsen Cognac, hand the keys to his house over to drinks giant, Remy Cointreau.

By the way, take a look and discover the Larsen bottles!

So, in the healthy market of today’s Cognac industry, why did he make the decision to sell the lucrative family business, created in 1926 by his Grandfather?  After all, it’s easy to see why Remy Cointreau were keen to acquire such a company; okay, yes, in fact Larsen opens doors to the Nordic market for Rémy (Larsen’s Grandfather, Reidar Larsen, was Norwegian.  And Larsen Cognac is a popular brand in the Scandinavian part of the world), but that can’t be Rémy’s goal here.

Rémy purchased a stock of 25.000 hl of pure alcohol

Given that Asia and especially China are key territories for Rémy Martin, one would rather think Rémy bought Larsen in order to get their hands on their stock: Apparently around 25.000 hl of pure alcohol.. and that’s not peanuts! A friend who works in the Cognac business tells us that the value of Larsen’s stock was around 100 million euros at the current market price.

larsen-cognac

But it’s harder to see at first why Larsen made the decision to part with his business in a time where the demand and consumption of Cognac is higher than production capacity.

And with rumours having circulated within the industry over the past few months about the sale, Larsen has taken the opportunity to put the record straight in an interview with Charente Libre, where he gave his side of the story.

One major reason is the state of the Cognac market at present.  It’s the very fact of demand outstripping supply that makes it extremely difficult for the average Cognac house to source and renew their stock.  However, the big houses, such as Remy Martin, Martell, Courvoisier and Hennessy, have rather more weight in regards to this.

Larsen said that rather than carrying on for the next few years with an ever-increasing depletion of stocks eaux-de-vie, he preferred to sell Larsen whilst the house was in blooming health.  In fact, it seemed that it wasn’t only Remy Cointreau who were interested in the purchase, but also Martell and Hennessy, as well as some Chinese potential purchasers.  However, Larsen decided to go with Remy Cointreau because he wanted the name of Larsen to continue, and that it was important to go with a buyer who wouldn’t just buy the house to use up their stocks of Cognac.

 

Why Larsen Cognac Sold Brand & Stock and what Rémy will do with it

And when asked about the family issue of selling the house, Larsen said that whilst there are many children in the family, some have already expressed the desire not to take over, and others are too young right now.  Not to mention the difficulties regarding inheritance tax and other such issues.

Whilst he declined to reveal the price of the sale, Larsen said that he believed that other trading houses could also be tempted to sell as well. Especially those who don’t actually own their own vineyards.

And whilst he’s understandably sad about selling the business in which he’s worked for the past 30 years, Fredric Larsen says he has no regrets.

What is Rémy Martin doing with all this Non-Fine Champagne Cognac?

The real question here is: What will Rémy actually do with all that stock? You would say, well, they might just use that for getting up their sales volume. But make no mistake: Rémy Martin is a Fine Champagne company, means that all their Cognacs come “only from the best” growth areas Grande and Petite Champagne of Cognac. That’s Rémy’s brand core and main product characteristic. But Larsen’s stock was not only Fine Champagne: So there are some options we see, either Rémy will release a new cognac that is not Fine Champagne, or a product will be altered (for instance we could imagine they could modify the blend of a cognac like Centaure), OR they use that cognac for other products that use cognac, but not necessarily Fine Champagne.

Learn more about the brands, and discover the cognac bottles of Remy Martin and Larsen.

Sources: www.charentelibre.fr

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Jacki has been with Cognac Expert from virtually the beginning. She's the senior editor of the blog, and has spent much of her life living in rural France. Today she's based back in the UK, where she splits her working life between writing for Cognac Expert and working as a Paramedic at a large regional hospital.

1 Comment

  1. Avatar
    Kim Birkedal Hartmann

    Great article and very true. I believe the selling price increased with 50 mill euros in 7 month. Cognac is a better investment than gold these days!!

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