IBP WINES & SPIRITS CHRONICLE
Australian Wine Export
Value Bounces Back in China
Australian wine exports to China
exceeded A$1bn ($640m) in the 12
months since tariffs were lifted in
March 2024, but volumes are not yet
back to pre-tariff levels, new data from
the trade body Wine Australia shows.
China lifted hefty tariffs on
Australian wine at the end of March
last year, ending three years of
punitive taxes which devastated some
of Australia’s winemaking regions.
In 2024, mainland China was the
top destination by value, with exports
growing nearly 2% to $1.03bn,
according to Wine Australia’s Export
Report which covers the period 1
April 2024 to 31 March 2025.
While value of exports to China are
now “at a similar” level to where they
were before tariffs came into force,
volumes sold are yet to recover, Wine
Australia’s market insights manager
Peter Bailey said in a statement.
Over the 12-month period export
volumes of Australian wine to China
grew roughly 2% to 96 million litres,
a 44% drop from its peak in 2018,
he said.
“While the total value of
shipments to mainland China is
now at a similar level to the years
immediately before tariffs on
Australian bottled wine came into
force, volume in the last 12 months is
23% smaller than the 5-year average
between 2016 and 2020 and 44%
below the peak in 2018.”
Bailey added that though the value
of exports to mainland China was
relatively back to pre-tariff levels,
volume levels showed the region was
“a premium market for Australian
wine and will therefore not solve
oversupply issues in Australia”.
China was key to the overall
success of exports. International
exports, excluding mainland China,
declined 13% in value to A$1.62bn
and 9% in volume to 551m litres, the
34 lowest value for exports excluding
China in ten years and lowest volume
in over twenty years.
The decline in value was driven
by lower Hong Kong sales, while
the volume drop was due to lower
demand in UK, the US and Canada,
the trade body said.
In the twelve month period, export
volumes to the UK dropped 8% to 208
million litres. Shipments to the US
fell 17% to 106 million litres, and to
Canada fell 19% to 60 million litres.
Weak Cognac Demand
Weighs on LVMH’s
Wine-and-Spirits Division
LVMH’s wine-and-spirits division
saw its first-quarter sales decline
due to weak demand for Cognac in
both the US and China.
LVMH said the division’s revenue
fell by 8% and 9% on a reported and
organic basis, respectively, to €1.3bn
($1.5bn) in the quarter.
For the Cognac and spirits segment,
organic sales dropped 17% on the
prior year to €736m, which LVMH
put down to ongoing “soft demand”
for Cognac in China and the US, and
“uncertainties” linked to US tariffs.
On a call with analysts, CFO Cécile
Cabanis explained, “The US political
context might not have helped on
demand in the most recent week.
As you know, wine-and-spirits is a
category that remains very much
linked to contextual issues as it
addresses aspirational customers.”
Champagne revenue dipped
1% on an organic basis to
€680m in the quarter, “reflecting
the ongoing normalisation of
demand”, the group said.
She said LVMH had “shipped
on stock” for divisions like wine-
and-spirits to “have a bit of time
to reflect and make sure we
have the proper parameters to
take the informed decision when
we will need to take action”.
LVMH’s Moët Hennessy
‘to Lay Off Thousands
of Employees’
LVMH’s Moët Hennessy has
reportedly planned to lay off
thousands of its employees.
Moët Hennessy’s CEO Jean-Jacques
Guiony and his deputy Alexandre
Arnault told employees at LVMH’s wine-
and-spirits division that it planned to
reduce its staff to 2019 levels.
In a video sent to workers, Guiony
reportedly said the current headcount
9,400 would need to be cut by around
1,200, equivalent to more than 10%.
Guiony added that the Moët
Hennessy business was seeing
2019 revenues, but that costs had
grown by 35% since that point.
“This was an organisation that
was built for a much larger size of
business,” Guiony said in the video.
LVMH’s wine and spirits division
saw its first quarter sales decline
last month, due to weak demand for
Cognac in both the US and China.
The division’s revenue fell by 8% and
9% on a reported and organic basis,
respectively, to €1.3bn in the period.
For the Cognac and spirits segment,
organic sales dropped 17% on the
prior year to €736m, which LVMH
put down to ongoing “soft demand”
for Cognac in China and the US, and
“uncertainties” linked to US tariffs.
Champagne revenue also
dipped 1% on an organic basis to
€680m in the quarter, “reflecting
the ongoing normalisation of
demand”, the group said.
Arnault also reportedly told
the company’s employees that
LVMH was facing a situation
that was a “bit unique”.
“Usually at LVMH when wines
and spirits are not going well,
fashion is doing well or some [other
part of the business] is performing
differently. Right now things are not
going extremely well,” he said.
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