Cognac had a difficult year in 2025, with both shipment volumes and sales declining sharply as demand weakened across its two core markets – China and the United States.
Data from the Bureau National Interprofessionnel du Cognac (BNIC) show that global shipments fell 15.1% year-on-year to 141 million bottles, while total sales dropped 25.3% to €2.24 billion (approximately $2.6 billion).
All major quality tiers recorded declines. VS fell 16.2%, VSOP dropped 11.5%, and XO and above saw the steepest contraction, down 23.2%, underscoring pressure across both entry-level and premium segments.
BNIC attributed much of the downturn to weaker demand in China and the United States. In the Far East — which includes China and Singapore, the world’s second- and third-largest markets by volume — shipments fell 20.5% to 37.7 million bottles, while sales declined 23.1% to €861.1 million (about $1.01 billion).
Exports to China alone were reported to have fallen 9.6% in volume and 23.8% in value in 2025.
The association partly linked the decline to trade tensions. In July 2025, China imposed anti-dumping duties averaging 32.2% on imported cognac, following an 18-month investigation during which industry sales in China dropped by roughly 25%.
However, importers on the ground offer a different view.
“The weak consumer environment is the primary reason,” said one importer, who declined to be named. “Last year, distributors stocked heavily, which has left the market with high inventory and reduced the need for new imports. The anti-dumping probe mainly made people more cautious.”
After China launched its investigation into EU brandy in 2024, some distributors accelerated purchases, temporarily inflating import volumes but leaving the market oversupplied. That imbalance is now feeding through into weaker demand.
At the same time, cognac’s traditional consumption base is eroding. Long tied to business banquets in regions such as Guangdong and Fujian, the category has been hit by a broader slowdown in corporate entertaining.
Younger consumers, meanwhile, are turning to lower-priced white spirits, limiting cognac’s ability to expand beyond its traditional occasions.
Imports continue to fall despite tariff exemptions
Data following the conclusion of the anti-dumping case further reinforce that demand — rather than policy — is the core issue.
Although China formally imposed duties on EU brandy in July 2025, it accepted price undertakings from producers, exempting compliant imports from tariffs.
Major brands including Rémy Martin, Martell and Hennessy — which together account for more than 90% of the Chinese market — were included in the exemption list.
Even so, imports have continued to decline. Chinese customs data show that between August and December 2025, brandy imports fell 27.5% in volume and 12.1% in value year-on-year. France accounted for 99.6% of total imports.
“In the current environment, smaller brands are under much greater pressure,” the importer said. “The leading players may actually gain share.”
US downturn compounds global pressure
The slowdown is not confined to China.
In North America — covering the United States, Canada and Mexico — shipments fell 19.4% to 56.9 million bottles, while sales dropped 34% to €737.3 million (around $860 million).
BNIC said the US decline was partly linked to trade policy. A 15% tariff on European wines and spirits, combined with unfavourable exchange rates, has pushed retail prices for cognac up by around 30%, weighing on consumption.
Taken together, the data point to a broader global slowdown in cognac.
While trade tensions have added friction, industry participants say the more fundamental challenge lies in weakening demand, shifting consumption patterns and lingering inventory pressure across key markets.
For now, the category appears to be entering a period of adjustment — one that may take time to unwind.
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