Manage current issues efficientely, while continuing to build the Cognac sector with a long-term vision : the ambition of the BNIC’s new three-year term
The anti-dumping investigation launched by China is one of the immediate issues on which the newly elected team has been working since the beginning of the year. 2024 will be a demanding and busy year for Cognac. Florent Morillon, the new president of the interprofession, and all the elected members of the BNIC Standing Committee are more than ever keen to meet the medium- and long-term challenges facing the Cognac sector. The industry’s environmental transition, its economic sustainability, market access and protection, employment and the attractiveness of the industry and the region will be the key areas of focus over the next three years.
© Alberto Bocos-Gil / BNIC
A COLLECTIVE MOBILISED TO ADRESS A BUSY AGENDA
• An exceptional 2023 harvest
The Cognac appellation confirms an exceptional 2023 harvest in terms of volume. With 12.2 million hectolitres of wine, this is the largest harvest ever recorded for grape varieties dedicated exclusively to Cognac. The level of production in 2023 will enable the region’s needs to be met and the climatic reserve of 250,000 hl AP to be replenished at an accelerated rate.
This year, the volumes not used in Cognac and not placed in the climatic reserve have been channelled into industrial outlets such as grape juice and sugar, without spilling over into other production regions.
The logistical challenges raised by this campaign were met thanks to the coordinated and rigorous management of the entire chain of players, winegrowers, merchants, interprofessional organisations, storage organisations, brokers, etc. “The strength of our collective enabled us to rise to the challenge of managing a harvest that was exceptional in so many ways. Everyone played their part in a spirit of solidarity and trust. It is this spirit that drives Cognac forward and is the glue that holds our industry together. With this three-year term, we will continue to build on this spirit.” said Florent Morillon, President of the BNIC.
• Full investment in the markets
After the record shipments of 2021 and 2022, and the logistical disruptions that began to have an impact in the second half of the year, 2023 was a year of intense market activity for the Cognac Houses, which had to adjust the stocks built up during Covid.
As announced, this context, which affected the spirits sector as a whole, had an effect on shipments in the region.
For the calendar year 2023, Cognac shipments* will fall by 22.2 % to 165.3 million bottles, compared to 212.5 million in 2022. The drop in value is 15%, with ex-Cognac sales of €3.35 billion. But as had been predicted several months ago, the situation began to stabilise from the end of the autumn, with a slight rise in shipments in December, particularly to the United States.
Shipments should continue to recover in 2024 at an uneven pace. However, the interprofession remains extremely cautious in the face of a complicated geopolitical context that will have to be taken into account.
Since 5 January 2024, the industry has been fully mobilised to successfully complete the anti-dumping investigation launched by the Chinese government. Cooperation with the Chinese authorities was immediate and rigorous.
At the same time, we have asked the French and European authorities to ensure that this issue, which is of a political nature, is dealt with politically.
*Figures for Cognac shipments in 2023, broken down by main market, can be found in the appendix.
A LONG-TERM VISION
On 25 January, the Cognac sector’s priorities for the coming years were presented. Florent Morillon summed them up with these words: “A greener, more virtuous Cognac sector that benefits the regional ecosystem. An industry that is resilient, attractive and ambitious for new generations, constantly conquering the world”.
The environmental transition remains at the heart of the industry’s priorities, with work set to intensify, in particular with today’s official launch of a new, more progressive and inclusive approach to Cognac Environmental Certification (CEC), centred on the winery. The R&D effort relating to this transition will be supported by the Imagine Cognac association.
In the current context, the protection and development of Cognac markets will be more than ever at the heart of the interprofession’s concerns. With this in mind, the industry will focus on securing its primary markets, while facilitating access to promising new markets.
Because the future of the region is important to them, Cognac professionals will continue their actions in favour of the region’s socio-economic dynamic, in collaboration with the institutional players on the ground. To this end, a study analysing the contribution of the Cognac sector to the region is currently being updated and will be unveiled in February. It aims to contribute to the attractiveness of the region and the dynamism of its economic ecosystem.
COGNAC SHIPMENTS 2023
For the calendar year 2023, Cognac shipments are down by 22.2% to 165.3 million bottles, compared to 212.5 million in 2022. The drop in value is 15%, with ex-Cognac sales of €3.35 billion.
– The NAFTA region recorded a 46.7% drop in volume, with 61.2 million bottles of Cognac and sales of €1,134 million, down 41.2%.
– In the Far East, Cognac shipments rose by 15.2% in volume and 13.2% in value over the rolling year.
– In Europe, the signals are mixed depending on the country, with a slowdown of -5.3% in volume and +0.7% in value.
– Other countries also saw an upward trend, with volume up 1.6% to 24.8 million bottles and value up 7.8%, underpinning future prospects.
– An upward trend has also been observed in other markets, such as South Africa (+24% in volume to 6.3 million bottles shipped, and +17% in value), which this year has become the fifth largest market for Cognac, opening up excellent prospects for the sector.
• NAFTA: CANADA, THE UNITED STATES AND MEXICO.
• FAR EAST: CHINA, HONG KONG, JAPAN, MALAYSIA, SINGAPORE, SOUTH KOREA, TAIWAN, THAILAND.
• EUROPE: EUROPEAN CONTINENT.
The BNIC, National Interprofessional Cognac Bureau, represents, develops and protects the Cognac Appellation d’Origine Contrôlée in France and around the world.
In over 150 countries where Cognac is present, this AOC gives the consumer the guarantee of an exceptional eau-de-vie. Composed equally of viticulture and trading professionals, the BNIC is the place for consultation and decision-making for over 4,400 winegrowers and vintage distillers, over 120 professional distillers and nearly 270 traders from the appellation.
The BNIC acts in the service of the interests of those who make Cognac and those who consume it, with a constant concern for responsibility towards all audiences of the appellation.