Replanting after the Phylloxera outbreak did not restore prosperity. After the First World War came Prohibition in the United States and crippling state duties in Britain as well as State monopolies in Canada and Norway. Things became so bad that in 1922 Hennessy and Martell signed a pact to work together, effectively carving up the world markets between them.
Ironically, it was the German occupation of 1940-45 which provoked the springboard for post war cooperation and prosperity. Cognac was occupied during the war but the commander was a sympathetic figure named Herr Klaebisch. He had been in school in Cognac before the war and his family had controlled the well-known firm of Merkow. Klaebisch tried to minimise the disturbance to the Cognaçais, although they had to supply the Germans with enormous quantities of brandy and Klaebisch’s boss, Rudolf Hess, was known to be particularly fond of good cognac. But the Cognaçais cheated by shipping a lot of spirits made from root vegetables, not dissimilar to the Irish Poteen. This preserved their valuable stocks of real and very old cognacs which is why we are still able to obtain many today.