Category: News

The Bottle is King, or so the big houses would have us believe. So much so that selling I year old grape brandy, bought for less than 1 euro a bottle,  set in some very fancy glassware and presentation boxes and then sold for HK$1000 (about £90). At least that is the price of one brandy offered by a big Chinese distributor.

Is it surprising that the market is flooded by fake products? One Cognac negoçiant suggested that as much as 80% of the Chinese market is fake and if that is so, then there is a lot of room in the market for the real thing.

Clearly the industry is suffering with these figures, as more real cognac could be shipped in place of the fake products. So what is the industry doing about it? Well not a lot, or so it seems.

Clearly with big pressures on cognac stock, the big houses probably don’t even care, as they are selling all that is available at the moment. The real problems will come when the market turns away from cheap and fake products and turns to other products such as whisky – as was the case in Taiwan. That too was once a big cognac market!

Brandclassics believe it’s what’s inside the bottle that’s important, and our carefully selected range of exceptional cognacs reflects this view.

The big exhibitions are always good places to see the latest innovations in the brandy world and the recent Vinexpo in Hong Kong has been to say the least, an interesting experience…

One such new brandy comes from South Africa. We met the firm by accident one evening after the doors of the exhibition had closed and they explained to us how they made their brandies, which are effectively a by-product from their wines. We went back the next day and tasted their brandy and after the initial shock of sweetness discovered that apart from making wines and brandies they also made honey, which they used to take away the aggressive fiery flavour of the young spirit.

It was a truly interesting experience since during the tasting we also discovered that they were distilling up to about 84 degrees of spirit. We were able to help them here and they will be changing distillation technique in the future and lowering the distillation range to prevent burning the brandy. They have promised to send us some, so watch this space!

Sales of cognacs, fuelled mainly by the massive demand for brandy products leapt 20% in the first six months of 2012. This represents an increase of approximately €200 million over last year. We have to ask, can we maintain this sort of growth when we are currently producing and selling cognacs that don’t have enough time to age sufficiently for their flavour to develop properly?

Cognacs from the top cru, Grande Champagne are the slowest to age and most producers prefer not to bottle them until they are at least ten years old. Naturally, we have to sell younger cognacs and the slow addition of water becomes a necessity. But at the moment the big four are buying cognacs at 2-3 years old and the quantity of young cognacs they are buying is increasing rapidly as is the prices we are having to pay for them.

The truth is that the increase in sales, mainly to China, means that the quality of these cognacs gets poorer every year and the levels of additives are increasing.

The Hong Kong Vinexpo Exhibition took place last month and both Hennessy and Martell were notable absentees. The sale of brandies in China has reached such large proportions that the big houses are now unable to meet the demand of Chinese markets. Admittedly, much of the talk is speculation, but clients are openly asking for supplies of fifty containers to supply their customers. Shipments of cognac are increasing massively as the Chinese middle class growth is expected to increase by 50% by 2015.

Sales of imported spirits into China, which includes some whisky, currently stand at 4 million cases. But this is small compared to the local firewater called Baijiu. Sales stand at 900 million cases and the average person drinks 11.6 litres of spirits a year!

The Chinese are keen to associate luxury drinks, particularly cognac with success and successful young professionals often build bars in their houses and stock them with luxury cognacs. Indeed the Chinese perception of luxury is more to do with the shape of the bottle rather than its contents. It is this very point that is the nub of the problem in China, where cheap brandies can be put into attractive bottles and sold at high prices.

Unfortunately the cognac industry is largely to blame with their use of generic titles such VSOP and XO.  This has created a valueless perception of what we are now selling, merely a strong coloured spirit in a fancy bottle. How much better would it be if we educated our customers to taste the difference between new and old and good and bad? This way they can recognize value and slow the fake markets.

All Hermitage Cognacs come with age statements and guaranteed provenance. Should a discerning Cognac buyer wish to sample a genuine luxury cognac, below are just a few examples from the exceptinoal Hermitage range.

It seems that there is always somebody who sees potential in a new cognac and sure there are a lot of cognac distillers out there and many negoçiants.

Take for example D’Ussé Cognac by Bacardi. It is a VSOP Cognac in an unusual bottle and is described “an interesting mix of medieval bourgeois and somehow a bit rough”! Then there is a range from Deau, again in smart bottles, there is Deau XO, Deau Black and the top of the range Deau Louis Memory, all are blended and quite expensive.

Remy Martin have introduced their Centaure de Diamant in a sort of cut diamond shaped bottle; it is said to be one down from their Louis XIII. It is a blend of 300-400 best cognacs. Pity about the cognacs – but the bottles are nice!

Could we suggest that rather than trying these bland, mass-produced Cognacs, delight your tastebuds with one of the many exceptional single-product Cognacs that we stock? Out Hermitage 10 year old is always popular…

The weather has again dominated the news in the Charente, The long dry summer spell has meant the grapes have failed to fill adequately for a really good harvest. This is a particularly rare occurrence as it coincided with lots of rain after the flowers had set and the grapes started to form, which led to difficulties with disease from mildew and rot. This meant that the vines had to be sprayed regularly to prevent disease spreading, but then came the sun!

The summer just got hotter and drier and the long period of hot sunshine that followed was initially what we all needed,. But you can have too much sun and the current predictions on the grape yield is likely to be between 15 – 25% down on last year. This news is not what we want to hear especially, with the demand for young eau de vie being so high. We will keep our fingers crossed!

The Charente region produces some exceptionally fine Pineau’s, which are a real treat if you’ve never tried it before. Some of our very old rare vintage Cognacs also originate in this region. So whether your budget is under £20 or over £10,000, we hope you’ll enjoy drinking the fruits of previous years’ more abundant grape harvest.

Move to develop easier International shipments

Over the years we have gradually expanded our stores and offices but with the potentially massive markets in China and the Far East developing,  we have decided to ship to these markets direct from where the cognacs are made. Sales of cognacs to China have grown massively in the last few years and we have had many enquiries for our Hermitage cognac range. Our facility in France will be associated alongside one of our key distributors near Segonzac in the very heart of Grande Champagne which is the top cru of Cognac.

The opening of the company in France will enable us to handle the taxation and duty more easily, thus avoiding shipping through UK bonding facilities, saving both cost and time. It will enable us to load larger shipments and send them direct to their destinations – this will be particularly attractive to the Far East markets. Initially the facility will be just offices and stores for holding the cognacs, but this gives us the opportunity to develop and install much larger tanks for holding cognacs. When shipping larger orders to the Far East, the need for holding thousands of litres of cognac becomes critical. We measure and buy cognac by the hectoliter of pure spirit, that is to say 100 litres at 100% alc. Of course it is never at that strength, but for taxation purposes it is essential we know how much alcohol we are moving at any one time. One hundred litres of pure spirit is the equivalent of 357 70cl bottles of cognac at 40% alc. So, if as hoped we are able to ship full containers – which are the equivalent of 900 cases of 12 bottles – we will require more than 2800 litres of pure spirit or 7000 litres at 40% – a not insignificant quantity!

Cognac distributors in China are failing to obtain sufficient stocks to fulfill demand. Many producers in Cognac are under pressure to supply valuable stocks to major negoçiants for blending in VSOP, XO blends. The shortage of supply is forcing prices up and leading to higher costs of new cognacs. Thousands of distillers all over the region are being asked to supply even younger cognacs for blending with inevitable loss of quality. Industry body the Bureau National Interprofessionel du Cognac (BNIC) said more than five bottles were sold every second in 2011, the total number of bottles sold rose by 6.4% to 162.9 million.

The Far East, which accounted for more than one-third of demand, was the biggest and fastest-growing market, with volumes up 14.4%. Sales in China alone rose by 20%, the BNIC figures reveal. Growth in Europe was more modest, with the region’s volume sales edging up by 0.4% to 46.9m bottles, while demand in North America rose 3.2% to 50.8m bottles.

Speaking to Reuters, Rémy Cointreau chief executive Jean-Marie Laborde spoke of his optimism for the coming year and his belief that the recovering US market coupled with the rapid growth in Asia will help counteract the continuing economic struggles in Europe. Laborde said that sales in the October-December period in particular had exceeded expectations, mainly due to increased Cognac shipments ahead of the Chinese New year. Is big brand optimism good for cognac? Certainly not for quality!

People are starting to frequent bars, clubs and restaurants in the UK increasingly more, often leaving the on-trade well placed to capitalise on “austerity fatigue”, according to new figures.

The Zolfo Cooper Leisure Wallet report, the biannual barometer of the Leisure industry, revealed that the frequency of visits to leisure establishments has increased despite average spend-per-visit continuing to drop. The increase is seen across the board, the first time any increase has been seen in the three main areas of leisure spending examined by the leisure Wallet since launching in summer 2010. However the spend per visit continues to drop in line with falling incomes across the country.

Over the year the national average household income across a sample of 3,000 consumers fell by £640 to £30,584. In total 48% of those interviewed said that their disposable income had decreased, while just 6% reported an increase. Despite this, visits are on the rise, suggesting a behavioral shift and recognition by consumers that if they spread their leisure spend; they can start going out more.

Over the last year drinkers have increased their visits to pubs and bars by to an average of 4.6 visits a month from 4.3 a month in summer 2011 and visits are even up on the 4.5 visits at the same time last year. However the current National spend per visit is now £14.69, a drop of 2.6% from the last report and 9.5% last year when the figure was £16.24.

The Cognac Masters, held every November has become to us something of a ritual since, Hermitage Cognacs have enjoyed very great success over the years at the competition.

Many of you will know that this year we won three Masters Medals, as well as the Cognac Grand Master for the sheer quality of our cognacs. One of the three medals went to the Hermitage 1988 Grande Champagne from Ambleville, a light and delicate cognac with great style. This cognac will be made available from the 1^st May. It is the very essence of quality and a worthy Masters winner.