LVMH’s (MC.PA) cognac brand Hennessy reached a pay agreement with workers Thursday, ending labor disputes that threatened production at the luxury giant’s spirits division.
The resolution removes a key operational risk for LVMH’s Wines & Spirits segment, which reported a five percent revenue decline in 2025 amid challenging market conditions.
Key Takeaways
- Hennessy agrees 6.8% salary bonus, minimum 3,200 per worker
- Deal ends strikes at LVMH’s struggling spirits division
- Wines & Spirits segment declined 5% in 2025
Deal Details
The Hennessy agreement includes one-off payments equivalent to 6.8% of annual salaries, with a guaranteed minimum of approximately 3,200 (3,817) per worker 1. The deal resolves disputes that began in December when the CGT union called strikes over canceled profit-sharing bonuses.
Workers had protested LVMH’s decision to eliminate annual benefits while maintaining shareholder dividends 4. The strikes initially targeted multiple LVMH drinks operations, including Moët Hennessy Champagne Services.
Market Context
LVMH’s Wines & Spirits division has faced headwinds, with cognac sales particularly pressured by Chinese market weakness. The segment’s five percent revenue decline in 2025 contrasted with stronger performance in the company’s fashion and leather goods division.
Labor unrest had added operational uncertainty to an already challenging environment for luxury spirits. Competitor Rémy Cointreau and Pernod Ricard have similarly struggled with cognac demand softness.
Union Response
The CGT union had been “fighting for decent wages and rejects the elimination of profit-sharing and incentive bonuses” before reaching the Hennessy accord 7. Earlier management offers included a 1,000 one-off payment, which unions deemed insufficient 9.
Separate disputes at other LVMH units, including Champagne operations, may continue despite the Hennessy resolution.
Business Impact
The pay deal removes production disruption risks at Hennessy, LVMH’s largest cognac brand. Labor stability becomes crucial as the company navigates weak Chinese demand and broader luxury market normalization following post-pandemic growth.
LVMH has not disclosed the financial impact of the Hennessy wage settlement. The company’s spirits segment contributes roughly 10% of total group revenue.
Outlook
While the Hennessy agreement resolves immediate labor tensions, LVMH’s spirits division faces ongoing market challenges. Chinese demand recovery remains uncertain, and inventory adjustments continue across the cognac category.
The pay deal may set precedent for resolving remaining disputes at other LVMH beverage operations. Investors will monitor whether labor costs pressure already weak spirits margins.
Not investment advice. For informational purposes only.
References
1(Jan 30, 2026). “LVMH’s cognac brand Hennessy reaches pay deal with workers, sources say”. Fashion Network. Retrieved January 30, 2026.
2(Jan 30, 2026). “LVMH’s cognac brand Hennessy reaches pay deal with workers, sources say”. TradingView/Reuters. Retrieved January 30, 2026.
3(Jan 28, 2026). “LVMH: Cognac issue remains as wine and spirits dip 5%”. The Spirits Business. Retrieved January 30, 2026.
4(Dec 3, 2025). “LVMH Strikes Over Bonus Cuts – Moet Hennessy”. Global Banking and Finance. Retrieved January 30, 2026.
5(Dec 3, 2025). “Strikes planned at LVMH’s drinks division starting on Friday”. Reuters. Retrieved January 30, 2026.
6(Jan 21, 2026). “Moët Hennessy Champagne workers strike over unpaid profit share”. The Drinks Business. Retrieved January 30, 2026.
7(Dec 11, 2025). “LVMH’s Moët Hennessy Staff Called Again to Strike”. Wine Business. Retrieved January 30, 2026.
8(Jan 30, 2026). “Doing THIS can burn 350 calories every day. What is THIS?”. 933 The Drive. Retrieved January 30, 2026.
9(Jan 9, 2026). “LVMH Champagne union calls for further strikes”. Fashion Network. Retrieved January 30, 2026.