LVMH Group sees strong growth potential in Phl market

MANILA, Philippines - Luxury fashion and wine maker LVMH Group is expanding its presence in the Philippines as the country’s economy continues to grow, a top group executive said. 

With improved economic growth prospects, the Paris-based conglomerate will broaden its product portfolio in the Philippines, anchored on its top-selling Hennessy cognac brand.

According to Bernard Peillon, president of Hennessy Cognac, who was recently  in the country for a two-day visit,  the Philippine market is growing significantly along with several other countries in the Asia Pacific region. 

He said the Asia Pacific region is actually Hennessy’s top market in terms of value even though the US ranks No. 1 in terms of volume. 

The Philippines, along with other emerging markets that include Vietnam, Malaysia and Cambodia, have been posting significant double-digit growth in terms of sales, he pointed out.

Based on such sales growth, Peillon divulged that “in the next five years and even beyond that,  we have some strong ambitions, in  terms of development,  in particular in the Philippines…so the prospective is extremely positive…in sync with the development of the Philippine  middle class…and the development of  the Philippine economy.” 

The Hennessy executive said the Philippines “is a place we need to pay attention to and we are dedicating proper resources to it.”  

He said the country has not  cracked yet into the top 10 markets for Hennessy. 

However, Peillon noted the Philippines’ significant GDP growth of  seven percent, which just slightly trails growth in Hennessy’s No. 1 market in the region, China.

He said Hennessy, as a global market leader, is “not interested to be focusing  on just one market…we are far more interested in not to put all our eggs in a basket…we have a long experience  of international expansion…two and a half centuries…and we know that worlds will shift and markets will shift in  dynamics…and you have to absolutely ensure that the  longevity of Hennessy is assured by not just focusing on one market or only one region, we are spread internationally.” 

Along this approach, Peillon pointed out that Hennessy will continually reach out to the younger generation with a range of brands that include the Hennessy V.S. (Very Special). 

Hennessy has also been actively engaging new young artists in the field of arts and music to constantly refresh the brand while maintaining its legacy. 

Through its Hennessy Artistry, Peillon said the company has been reaching out to the younger generation  to experience the product in various ways. 

Peillon  also expressed confidence that the recent adjustment in the Philippines’ excise tax structure would not  dampen demand for the spirit. 

Although the excise structure in different markets  would affect the pricing of Hennessy products, Peillon assured that  the LVMH Group  maintains a very disciplined approach so that  pricing of its products are closely similar. 

Apart from the Hennessy brand which includes the high-end X.O (extra old), the LVMH luxury beverage portfolio includes Moet & Chandon, Veuve Cliquot, Dom Perignon, Belvedere vodka and a number of whisky and wine brands. 

The biggest revenue contributor to the LVMH Group remains the iconic Louis Vuitton brand, with Hennessy coming in second.