Category: News

Workers at Hennessy’s cellars of Haut-Bagnolet walked out last Tuesday as a show of solidarity against wages. They are seeking a bigger share of the cognac producer’s profits.

Urged by the unions (Intersyndicale CGT and Force Ouvriere), employees are not happy at the breakdown of talks earlier in the week at the mandatory annual negotiations about a reassessment of staff wages. CGT delegate Francoise Puchaud stated that the company wants to bring in a reassessment well below the company’s growth. Business is looking strong for 2011 and the proposed offer for employees is not keeping with this. Hennessy have refused to grant an annual wage increase of 1.8% one which is already considered by the unions as too low.

The unions are stating that the company has grown by around 25% and that the dividends to its shareholders will be more than double this year.

Brandyclassics stock a range of  vintage and rare cognacs, carefully chosen from the cellars of selected single estate cognac producers.

Hennessy are in the news again. This time its for all the wrong reasons. It appears that somebody has been making off with some of their massively expensive Ellipse cognacs and selling them back onto the market. One has to ask who is the bigger crook. The cognac priced at 7565€ is a blend of seven different eau de vie, some of which must come from other than the champagnes, plus there is no age statement on the bottle! We have to hope that there is some of the increasingly costly pre-phylloxera blended in to justify the price.

Indeed, early pre-phylloxera cognacs have increased in value considerably over recent years, with prices in the last four years going up by more than 200%. Whilst bottles are still available from around 1800, they are becoming increasingly more difficult to find and the indication is that prices will go up even faster in the future. Currently, a bottle of 1856 has a trade price similar to the Hennessy Elipse and it comes from the region now known as Grande Champagne, I think I know which I would prefer!

Brandyclassics have a number of very rare Pre-phylloxera cognacs for sale, from famous houses such as Hardy, Massouges,  Eschenaeur & Co, Moyet and Jules Robin.

During last November, customs officials seized a record quantity of wines and spirits from smugglers attempting to sell them on the open market in the UK. In essence it is not difficult to see why – some people will attempt to bring spirits into the UK without paying duty or taxes, since the duty rates have been steadily increasing over the last few years. And these increases are on top of what were already the third highest duty rates in Europe, with only Finland and Ireland paying more.

The current rate of duty on spirits which we have to pay is £23.80 per litre of pure alcohol. Rates on wines are £225/100 litres and champagne £288.20/100 litres. If we equate this to the duty on a bottle of spirits at say 40% alcohol we have to add just over £6.66 a bottle – but the story doesn’t end there.

VAT is charged on the combined value of both the brandy cost and the duty; in effect double taxing alcoholic drinks in the UK. A costing preview of one of our very lowest cost armagnacs (it is one of superb quality), reveals that depending on the exchange rates at the time, we buy it at slightly less than the duty, making a combined price of £12.80. VAT on top of that raises the price to £15.36 and after we add in the cost of getting it and bonding the cost increases to £16.98. Packaging adds another £1.20, providing a gross total of £18.18. Financial experts will also recognise that we have to cost in our overheads, which means our margin is probably slightly less than a pound when we sell it to our trade customers.

Fortunately we sell a lot of brandies at rather more than £22.20 a bottle, but this exercise serves to indicate just how much of a bottle’s value goes to HM coffers. Which leads us to ask the question, if duty rates were lower, would the Government collect more duty? UK rates are about 3 times that of many other EU countries…

March 31^st is the official end of the cognac year when all distillation must cease. In practice distillation will probably have finished around Christmas, but on the 1^st April all cognacs become ‘comtpe 0’ – the official start of the cognacs long ageing process.

Cognacs put into barrels by 31^st March 2011 will become 1 year old on 31^st March 2012. This is the reason why people tend to express ages using the half year term. For example, three and a half when referring to the minimum ages of VSOP, or six and a half for XO. A cognac may have been put into the oak barrels in April, or in late March, a difference in maturation time of over 11 months! With the larger manufacturers using increasingly short maturation times, this “half year” can make a noticeable difference.

Some of the Hermitage cognacs made this year will be ready to drink in another fifty years. Hermitage cognacs are all aged naturally and that is why they are so good…

It seems that the onward march of cognac is continuing. Despite the recession sales of cognac on a worldwide basis are only 5 million bottles short of the 2007 world record year. Indeed, volume sales were up 18% on the year to 153.1 million bottles, according to the Bureau National Interprofessionnel du Cognac (BNIC).

In value terms the increase was even more startling – with the value increasing 30% to €1.86 billion. It appears that the key driver was the Far East, where we have been seeing substantial increases over the last five years. Shipments to the region increased by 34% on 2009 to 50.9 million bottles. China lead the way with sales rising by 55% to 18.8 million bottles. Shipments to America increased by 7.5% to 49.2 million bottles, closing in on the 2007 record of in excess of 50 million bottles. European sales also increased in 2010, with an 11.7% increase to 46.7 million bottles. The UK is by far the biggest consumer of cognac in Europe with more than 23%.

Interestingly, the higher qualities cognacs provided most of the growth. For the first time the luxury qualities exceeded the regular qualities with sales of 54.5% and growing faster than the VS markets at 6%.

It seems that consumers are becoming more discerning in the cognac that they buy, which here at Brandyclassics we’re very excited about. We don’t sell generic supermarket VS, VSOP and XO brands, but concentrate on sourcing and supplying distinctive, unique marques for the cognac enthusiast.

It is rare for us to get excited about a new armagnac but we feel rightly pleased with our new association with Eric Artiguelongue a notable cellar master in Arblade le Haut, Gers.

Brandyclassics have taken the exclusive distribution for these wonderful Clos des Saveurs armagnacs in the United Kingdom where we will be demonstrating the fine qualities and range of vintages which come from a number of different distillers in the Bas region. Not only are we impressed with the qualities of each individual vintage, but we were also able to bottle them in the traditional basquaise bottle, sealed with red wax. Presentation boxes are also available and a new oval label will provide an attractive but traditional presentation.

Perhaps the key feature of these delightful spirits is their competitive prices. In a world where vintages are increasing in price rapidly, they offer a level of stability over the next few years which other houses will find hard to compete with. This is the first new range of armagnac’s we have been able to offer for a number of years- they are  highly recommended and available now.

Brandyclassics’s range of Clos des Saveurs Bas Armagnacs include some very rare 1900 and 1893 vintage Armagnacs, in addition to more recent vintages.

Due to rapid expansion, Chateau de Beaulon opened a new cellar in August 2010.

It is difficult to understate the success of Chateau de Beaulon in the last two or three decades. The firm are distillers and the credentials of it’s owner Christian Thomas can only be matched by the superb cognacs he produces, mainly from the Ugni Blanc but also the Folle Blanche and Colombard grape varieties. The Thomas family have reigned supreme around St Dizant du Gua in the most westerly part of the cru for centuries but have only owned the Chateau since 1965.

Cognacs and Pineau have been made there for centuries, but it is only since the Thomas family have been the firms owners that real growth has taken place. Their well balanced cognacs have sold in many countries and a limited number of vintages have helped to swell the firms turnover, thus requiring greater warehousing and storage facilities.

The new warehouse is a truly beautiful state of the art building which bolsters the firms green credentials using gravitational force for storage and bottling. Soft lighting in the main section creates a defining influence of the quality produced from this fourth cru estate.

Brandyclassics sell a wide variety of Chateau de Beaulon cognacs and pineaus, a small selection of which are shown below.

BNIC Statistics for March 2010 have revealed that stocks of old cognacs used by the big houses has dropped to one of the lowest levels ever, with only 2.9% of 4 and 5 year old stocks available for blending and 1.8% of stocks over 6 years old. In comparison, new cognacs, which are up to 1 year old are 64.4%

This indicates that blended cognacs such as VS and VSOP from the big houses will require to be even younger to meet the increasing demands of consumers, especially in America where sales, particularly those of Hennessey have increased and are now better than the pre-recession 2008 level. China, Hong Kong and Taiwan have all increased their purchases considerably over the last 12 months.