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The history of Cognac – Post war cognac

The end of World War II  was followed by approaching 30 years of growing prosperity. The newly formed BNIC started to improve the relationship between growers and merchants and was in turn lubricated. The biggest changes were in the structure of the biggest firms.

In 1947 the relationship between Martell and Hennessey came to and end when they failed to renew their agreement. Martell remained independent, but in 1971 Hennessey merged with the champagne firm of Moët & Chandon. The big two became the big four through the growth of Courvoisier and Rémy Martin. The firm of Courvoisier was established in the late 18th century and it’s name became synonymous with the Napoleon hat – a representative of the firm once said that there was more than a thousand originals scattered around the world. Courvoisier was taken over in 1964 by Hiram Walker, who were themselves taken over in 1986 by Allied Lyons. Remy Martin was able to grow without the aid of outside capital, selling their cognacs only from the Champagnes.

In the post war euphoria production had greatly increased. Whilst the area of land planted with vines was still less than half of that reached in the 1870s before Phylloxera, viticultural techniques had so improved that by 1973 production had  reached nearly double of that a hundred years earlier. Around this time production levels stood at 264 million bottles, but as sales dropped considerably due to the oil crisis, this was more than twice what was being sold.

Substantial tax increases in 1983 had turned the shippers to rely on export markets. Help was on hand in the form of the Chinese, whose beliefs in the medicinal and status related benefits of cognac meant they were prepared to spend heavily to gain access to the products. By 1988 sales to Hong Kong reached more than 17 million bottles, most of which was shipped across the borders into China in clandestine operations giving serious concern to the authorities.

During the difficult years the big houses cut back their offtake from the growers, which caused serious financial difficulties for many, even driving some out of business. In some ways this later proved to be a benefit, since many started to sell their cognacs under their own name, a move which has provided many more brandies of much higher quality. The growth in the markets led to foreign companies buying established names. Otard went to Martini and Louis Royer was sold to the Japanese, whilst the Candian firm Seagrams bought Martell. The Americans now hold the top spot with more than 50 million bottles being shipped every year. Britain is in third place after Singapore with sales of around 13 million bottles.