Laurent-Perrier Group Faces Decline in Sales Amid Geopolitical and Economic Challenges
Laurent-Perrier Group, headquartered in Reims, experienced a significant decline in sales volumes during its 2023-2024 fiscal year, outpacing the average fall in the broader Champagne region.
The group attributed these challenges to ongoing geopolitical upheavals and economic uncertainties, which have disrupted markets globally.
In detail, Laurent-Perrier reported a 12.4% decrease in sales volumes, although it did not specify the exact volume figures. This decline surpasses the overall global Champagne market, which saw an 11.8% reduction in volume during the same period. Despite this downturn, Laurent-Perrier managed to increase its group turnover by 0.5%, reaching EUR 303.5 million (USD 329.07 million). This growth was primarily driven by strategic price increases, which helped offset the volume losses.
The company highlighted a "positive price/mix effect of +13.0% versus year N-1" as a crucial factor contributing to its value performance. This indicates that while fewer bottles were sold, the increased pricing and favorable mix of higher-value products helped maintain the group's revenue.
In its half-year results announced in November, Laurent-Perrier noted that the volume declines were part of a return to normal consumption levels, following an exceptional increase in Champagne consumption in the post-Covid period. The company emphasized that 2022 provided a high comparison base due to the "sharp rise" in consumption as markets rebounded from the pandemic. This perspective aligns with the Comité Champagne's earlier assertion that the falling sales volumes reflect a return to stability, with Champagne shipments reverting to pre-Covid levels after three extraordinary years of heightened demand.
Vintage Wine Estates Faces Financial Crisis
Meanwhile, the US wine group Vintage Wine Estates (VWE) recently published its quarterly figures, painting a worrying picture for the company. With a debt-to-equity ratio exceeding 410%, VWE is grappling with plummeting sales. Turnover in the three months ending March—the third quarter of VWE's financial year—dropped by nearly 30% to USD 45.7 million, while turnover for the year to date has fallen by 15% to USD 186.9 million.
In the statement accompanying the quarterly figures, VWE painted a bleak outlook for its future: "Our management has identified that there is a substantial doubt about our ability to continue as a going concern," it stated. "We may not be able to repay, refinance or restructure our substantial indebtedness owed to our lenders, which would have a material adverse effect on our financial condition and may cause us to seek bankruptcy protection."
VWE, which includes brands such as Bar Dog, B.R. Cohn, Cameron Hughes, Cherry Pie, Firesteed, and Clos Pegas, has been in difficulties for some time. Efforts to stabilize the company, including appointing Seth Kaufman—former North American CEO of Moët-Hennessy—as CEO, have not yet yielded successful results.
Conclusion
The contrasting fortunes of Laurent-Perrier and Vintage Wine Estates highlight the volatility and challenges facing the wine industry in today's geopolitical and economic climate. While Laurent-Perrier has managed to navigate these difficulties through strategic pricing and product mix, Vintage Wine Estates is facing a critical financial crisis, underscoring the need for effective management and adaptability in these turbulent times.