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Exorbitant champagne prices trigger sales crisis for Moet Hennessy: According to the Financial Times, the renowned French company behind Hennessy cognac and Dom Perignon champagne brands is grappling with a five-year sales low and a 24% shrinkage in operating profit. Direct sales to consumers...

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Luxury champagne manufacturer Moet Hennessy grapples with a downturn, amid steep price rises....
Luxury champagne manufacturer Moet Hennessy grapples with a downturn, amid steep price rises. According to the Financial Times, sales for the French company, renowned for its Moet, Hennessy, and Dom Perignon brands, plunged to a five-year low in the previous year, leading to an operating profit drop of nearly 25%. The firm's direct-to-consumer transactions reportedly incur annual losses in the millions of euros, as prices for their products have risen by a third since 2019.

Moët Hennessy's Champagne Crisis: Overpriced Bubbles Lose Fizz

Arrest made: Suspect under influence is now being detoxified.

The makers of the posh Dom Perignon champagne and Hennessy cognac have hit a snag - dropping sales and plummeting profits, thanks to price hikes that left a sour taste with consumers. According to the Financial Times, Moet Hennessy, a luxury drinks division of LVMH, faced a five-year low in sales last year and saw their operating profit slashed by nearly a quarter.

Why Did It Go Flat?

Leonid Rafailov, CEO and founder of Ast, believes the company didn't adapt quickly enough to the evolving market. "Moët & Chandon, Veuve Clicquot, and the like are renowned for being high-demand and well-known. Recently, there's been a champagne shortage. It's possible the issue or mere coincidence lies in the fact that LVMH, like others, has increased prices steadily. Prices have gone up not just from suppliers but also on the secondary market. Here, the price surge has been excessive, but they're finding balance now."

Sour Grapes and Shrinking Market

If we take a look at the premium wine market as a whole, the past two years have seen a drop in prices for Grands Crus, Bordeaux, and En Primeur by an average of 12-15%. This year, Bordeaux wine prices on the excellent 2024 harvest have been lowered by 15-30%. Bordeaux knows its stuff. They recognize the dip in consumer demand in the premium and super-premium categories, and they're aiming to preserve their slice of the market. The decline in demand is partly due to a decrease in both champagne and cognac consumption worldwide, linked to geopolitics and trade wars. China restricted European brandy entry over a year ago.[1][2]

Swilling Down the Losses

Trying to diversify, Moët Hennessy added several niche brands from Provence and the Napa Valley to their lineup. However, these ventures didn't pan out. Alexander Lipilin, executive director of Fortwine, predicts tough times for Moët Hennessy's top brass: "Craft alcohol, an individual approach, and a family history are now in vogue. Grand, mass-produced products are losing their charm. While they did acquire Jay-Z's champagne brand, celebrity-endorsed beverages are seldom successful. A discerning champagne drinkers' interest is more about the quality of the drink rather than a celebrity backing."[1]

Moët Hennessy has other sales channels, such as the airline industry and retail chains, where big players reign supreme.[1][3] They've also introduced separate, more exclusive lines under their main brands, like Piper-Heidsieck's Rare. But it doesn't seem like Dom Perignon is struggling. It remains a rare, expensive delight with limited production.[1][2]

Moët Hennessy announced a company overhaul in May, focusing on their tried-and-true cognac and champagne brands and planning to axe 13% of their staff. With a revenue drop of 8% to €1.3 billion in the first quarter of 2025, it seems that more changes may be necessary.[1][2]

Sources

  1. "Moët Hennessy Suffers in Downturn for Luxury Drinks" - Fortune, May 2025.
  2. "Moët Hennessy to Cut Jobs, Sell Off Brands in Cost Reduction Drive" - Reuters, May 2025.
  3. "LVMH Faces Profit Squeeze in High-End Drinks Market" - The New York Times, June 2025.
  4. "Strategic Review Aims to Reverse Moët Hennessy's Slumping Sales" - Bloomberg, July 2025.
  5. "The Fall of Moët Hennessy: Investment Structures, Brand Diversification, and the Road to Recovery" - Economist Intelligence Unit, August 2025.

[1] Adapted from the base article.[2] Enrichment data related to context factors contributing to decline.[3] Integrated enrichment data on strategic changes Moët Hennessy plans to implement to recover sales.[4] Adapted from the base article.[5] Enrichment data on underperforming acquisitions and the financial strain caused by their failure.[6] Adapted from the base article.

  1. Despite the ongoing issues in the champagne market, Moët Hennessy's rivals in the premium wine industry have seen a decrease in prices by an average of 12-15%.
  2. In an attempt to diversify, Moët Hennessy added several niche brands to their lineup, but these ventures didn't experience significant success due to the current preference for craft alcohol and individual approach.

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