Cognac, Moday

MAJOR French exporters such as Remy Cointreau are extremely concerned

by the looming trade war with America. Yesterday, chairman Andre Heriard

Dubreuil expressed his concern but put the onus for the dispute upon the

Americans, claiming that the Americans are asking for too much.

The cognac, liqueurs and champagne group will announce its half time

figures this morning. These are expected to reveal that there has been a

significant drop in cognac sales to Japan of perhaps as much as 25%.

More positively, his son, joint managing director Francois Heriard

Dubreuil, said that Britain has begun to re-order champagne again -- the

house brands are Piper Heidsieck, Charles Heidsieck and top of the

market Krug.

The major growth markets will be the Far East and particularly China

where one Cantonese retailer recently sold on one day eight bottles of

cognac at a price of over #1000 each. Group emphasis is concentrated

upon the quality end of the market rather than high volume although it

now accounts for 15% of the cognac market.

Sales of Highland's Famous Grouse in France are still expanding. The

deal with Highland Distilleries looks increasingly more beneficial to

both sides as Grouse will probably by the end of the decade be the UK

market leader and so increasingly will have to protect its position by

expanding its international sales through the Remy distribution network.

The possible breakdown of Gatt will have little immediate impact upon

Remy as it has shipped enough product to the US to cover likely demand

until well into 1993.