Pernod Ricard axes head of Cognac division

The Cognac world is shifting on its axis with new bosses announced for both Rémy Cointreau and Pernod Ricard this week. Can the new appointments help to transform the category's fortunes? According to a leaked internal memo seen by Reuters, Pernod Ricard's head of Cognac Philipe Neusch is leaving the business to be replaced by the company's existing head of Champagne, Francois-Xavier Morizot. Morizot will oversee both Champagne and Cognac under one role at the French spirits group, which owns the Martell and Augier Cognac brands, as well as Romanian brandy Ararat. Pernod Ricard has been custodian of Martell, the oldest of the great Cognac houses, since 2001, and over the years has succeeded in transforming it from a dwindling label under former owner Seagram into a spirits powerhouse. Made using grapes from the Charente region in south west France, Martell was one of the fastest-growing brands in the Pernod Ricard portfolio in the mid-200os, with sales shooting up by 11% in just one year (2005–2006). According to IWSR, Martell also made it into the top 10 global travel retail brands in 2016, shifting 363.6k 9L cases in 10th position, just behind Hennessy in 8th position with 556.8k 9L cases sold.

Turning tide

However, the brand has been having a rough ride lately, and in February 2025 Pernod Ricard revealed that Martell was responsible for about 90% of the company's total 4% sales decline for H1 FY2025. In results for the six months to the end of December 2024, Martell was the worst-performing of the group’s ‘strategic international brands’, with value sales plummeting by 25% and volume sales dropping by 19%. A statement released by Pernod read: “Ongoing challenging macroeconomic environment and intense geopolitical uncertainties continue to impact the spirits market, particularly the worsening context in China and travel retail Asia, notably impacting Martell. This leads us to revisit our outlook for FY25 and beyond."

Chess game

Pernod is not the only global spirits giant moving chess pieces on the Cognac board, with Rémy Cointreau announcing a new CEO just days ago. Francke Marilly will take over the position from Eric Vallat in June, while Vallat leaves to pursue "a new professional project". “We are convinced that he [Marilly] will bring a new dynamic and will be able to confidently address the new challenges of the Group’s growth in a complex macro-economic and geopolitical context,” said Marie-Amelie de Leusse, chairman of the board of directors at Rémy. Both Morizot and Marilly will be glued to ongoing EU conversations with China, which are paramount to the future success of the Cognac category. China first launched its "anti-dumping" investigation into EU brandy in January 2024, and the investigation has painstakingly dragged on. It was due to be completed in April 2025, but last month China again extended the postponement of the tariffs for a further three months. Despite the ongoing investigation, the import taxes (around 35% on average) on EU-made brandy came into force in the form of guarantees from 11 October 2024 and the Cognac industry says it is costing it about €50 million per month.