It’s no secret that the luxury sector is in a bit of panic now that China’s reining in its spending, but it seems the high-end spirits industry has nothing to fear. Despite President Xi Jinping’s crackdown on extravagant gifting (traditionally in the form of expensive bottles) for the last four years, Remy Cointreau has reported a 9.8 per cent increase in revenue from the last quarter – and the maker of Remy Martin and Cointreau says it has Greater China to thank.
While fashion brands like Louis Vuitton, Gucci and Burberry have closed dozens of stores in recent years, the makers of Remy Martin cognac and Cointreau have just opened the world’s first dedicated Louis XIII boutique in Beijing, and its wares are anything but modest — 5cl miniatures go for US$600 (S$834), while its crown jewel, a six-litre vessel dubbed the “Methuselah”, is going for US$80,000.
And it’s not just cognac. Treasury Wine Estates have more than doubled their profits to US$46.5 million through exports of Penfolds and Wolf Blass to Asia, with the largest export destination being Greater China.
So what’s driving Chinese thirst? Drinks analysts believe it has to do with the changing demographic of the luxury consumer. The country’s tycoons may not be hurling their cash at excessive dinner parties anymore, but their successors aren’t pinching pennies. The young, upper-middle-class drinkers are taking their place, albeit more conservatively. They may not be the ones to buy Remy Martin’s US$80,000 beast, but there are enough of them to make such companies release more reasonably priced editions, such as Martell’s Noblige and Remy Martin’s 1738.
Compared to diamonds and handbags, a fine spirit is an affordable luxury, and it still maintains the tenets of the category by offering heritage, quality and style.