Cyril Godet of Cognac Godet says the selling of old stocks to China is not only forcing brands away from ‘faithful’ markets but also pushing prices outside of traditional customers’ reach. “I’m not keen on the way it is going,” he says. “The boom is about making money and it will lead us towards a scarcity of old Cognac. We are shooting ourselves in the foot. The big companies are looking at [sales] quarters. That’s valid but Cognac is a product from the ground, it has a limited availability. I feel we have a commercial strategy that is not in line with the agricultural capabilities. In whisky when they grow sales they make more whisky, so it’s sustainable. We are selling our old Cognac. What will happen in 10 years? We will be dry.” The taste of Cognac is also evolving because of Asian palates, says Godet. “Cognacs are becoming woodier, heavier and deeper. There is a funnelling of perception of what Cognac is.” 

Growth of Cognac’s global volumes is at 8.2%, so for now it is still in an extended boom phase. And, while some brands may not like to talk about it, sustained volume growth, must be serviced somehow. Aside from year-to-year variations in harvests, broadly speaking, production in Cognac is as fixed as the region’s demarcated boundaries. Crudely put, unless the average ages of VSOP and XO are being dropped back to their bare minimums (heaven forbid), reserves must be being plundered. The big companies assure us of careful cellar management, but extra stocks have to come from somewhere. 

Martell parent Pernod Ricard’s purchase of winemaker, distiller and wholesaler Le Maine au Bois SAS signals a trend towards category consolidation that is likely to intensify in unison with a clamour for stocks. The announcement that CL World Brands’ Hine is up for sale must have pricked some interest too, though not a lot is known about the brand’s inventory. 

The simple solution is to extend the boundaries but, according to Godet, that will not be ruled on by the EU until 2015 at the earliest, 2018 at the latest. Then the vines have to be planted and matured, the grapes grown, the wine made and the Cognac distilled and aged. If we are headed towards a scarcity of aged Cognacs, there will be no shortcuts to replenish them. Perhaps it is premature for the French proverb: We never know the worth of water till the well is dry.