The world's leading hard liquor producers have faced the weakest demand in recent years.
Modern.az reports that, according to the "Financial Times" newspaper, the total value of finished product inventories accumulated in the warehouses of large producers has reached 22 billion dollars, which is considered the highest figure in approximately the last decade.
Among the main reasons for the decrease in demand are the popularization of a healthy lifestyle, the impact of inflation on purchasing power, and deeper social changes occurring in consumption habits.
According to the information, the problem is more acutely felt in the warehouses of giants such as "Diageo", "Pernod Ricard", "Campari", "Brown-Forman", and "Rémy Cointreau". For example, "Rémy", a French cognac producer, currently has 1.8 billion euros worth of products in its warehouses. This amount is approximately twice the company's annual revenue.
The increase in unsold inventories has also led to a temporary halt in production. Japan's "Suntory" group has closed its main plant in Kentucky, USA, where "Jim Beam" bourbon is produced, for at least one year. At the same time, "Diageo" has suspended operations at its whiskey production facilities in Texas and Tennessee until the summer months.
Companies have also been forced to lower prices. While a bottle of Hennessy cognac was sold for up to 45 dollars in the US during the pandemic, the price has now dropped to 35 dollars. Analysts state that production was expanded in response to a sharp increase in consumption during the COVID-19 pandemic, but it became clear in 2021–2022 that the market would not continue at this pace, and control was lost.
Renowned expert Trevor Stirling believes that the weakening of demand in subsequent years was inevitable. Alongside inflation and declining incomes, a shift in attitudes towards hard liquor, the promotion of a healthy lifestyle, and the widespread use of weight-loss medications also reinforce this trend. As a result, the approach that "alcohol is no longer in fashion" is becoming increasingly evident in the global market.
