Changyu Sells French Cognac Estate for $5.2 Million to Cut Losses

Changyu, China’s largest wine producer, is selling its French Cognac estate and related property for 4.8 million euros (about US$5.2 million) as part of ongoing efforts to offload underperforming assets and shore up its finances.

This is the Chinese listed company’s third major asset sale in two years as the company faces mounting financial pressure.

In a statement released on June 9, Changyu said it will sell its wholly owned French subsidiary, ETABLISSEMENTS ROULLET FRANSAC, along with associated properties, to France’s Elior Group SA. The company acquired the estate in 2013 for 3.58 million euros.

The move reflects growing pressure on Changyu’s brandy and wine business, both of which have struggled in recent years amid weakening consumer demand and shifting market conditions. The sale is part of a broader effort by the company to reduce costs, improve operational efficiency and focus on its core domestic business.

Roullet Fransac, founded in 1838 in France’s Cognac region, was one of the area’s earliest producers to bottle and sell its own products. In 2014, Changyu transferred the estate to a newly established French subsidiary, Francs Champs Participations, as part of its broader push into the premium brandy segment.

At the time, Changyu said the deal would help accelerate its brandy strategy, secure scarce Cognac resources, and give the company an edge in China’s fast-growing Cognac market.

But the market has since cooled. In 2024, Changyu’s annual revenue dropped 25.3% year-on-year to 3.28 billion yuan, far short of its target of 4.7 billion yuan. Net profit fell 42.7%, hitting its lowest level since 2005.

Changyu’s overseas ventures have also struggled. Roullet Fransac posted revenue of 1.35 million euros in 2024 but recorded a net loss of nearly 24,000 euros, according to publicly available records. At the same time, sales of Cognac in China have declined amid falling demand for business entertaining and an ongoing anti-dumping investigation by Chinese authorities into French brandy imports.

Even major players such as Hennessy, Martell, and Rémy Martin have faced mounting pressure. Smaller brands, like Roullet Fransac, have found survival even more difficult.

Changyu said the divestment would allow it to focus on developing its domestic high-end brandy label, Koya, while also freeing up capital and streamlining its asset portfolio.

The Cognac estate sale follows two other major divestments in recent years. In late 2024, Changyu sold its Laizhou Zhuqiao vineyards in Shandong for about 221 million yuan. In 2023, it sold a 39% stake in Lang Fang Development Zone CASTEL-CHANGYU Wine Co., Ltd. and a 10% stake in a related sales company to a local trading firm for about 10.9 million yuan.

Langfang Castel-Changyu Winemaking Company was established in 2002, the same year Changyu partnered with French wine giant Castel to launch a winery in Yantai, Shandong. According to the Chinese business database Qichacha, the Langfang company is a joint venture between Changyu and the French firm VASF. Alain Castel of Castel Group, previously served as the company’s chairman—further indicating that the Langfang winery is also a joint asset of Changyu and Castel.

As China’s wine and spirits market remains sluggish, Changyu’s strategy of selling non-core assets appears aimed at weathering the downturn and refocusing on more resilient segments of its portfolio.