By Tassilo Hummel
PARIS, Jan 30 (Reuters) – LVMH’s cognac maker Hennessy, the largest of its drink brands, has reached a pay deal with unions to compensate for bonuses lost last year due to weak sales, two sources told Reuters.
The agreement, expected to be formally signed on Tuesday, brings some relief to LVMH’s drinks division, which has recently faced strike action, a rare event in the luxury industry.
The Hennessy deal includes one-off payments of 6.8% of annual salaries, with a guaranteed minimum of around 3,200 euros ($3,817) per worker and a limit of around 6,500 euros, the sources said.
A company spokesperson declined to comment.
“This means there will be no strikes,” said one of the sources who declined to be named because the discussions were private.
The Hennessy deal contrasts with the situation at LVMH’s champagne brands Moet & Chandon and Veuve Clicquot where the CGT labour union has called for further strikes over lost bonuses.
Workers are expected to protest near the Paris offices of LVMH’s drinks division Moet Hennessy, based on union leaflets handed out to staff.
Profits at the group’s drinks division, co-run by Jean-Jacques Guiony and Alexandre Arnault, one of the sons of CEO Bernard Arnault, have halved over the past two years, LVMH reported this week.
Cognac revenues have been hit hardest due to tariffs in the U.S., Hennessy’s biggest market by sales, coming on top of sluggish overall demand for alcoholic drinks.
The CGT union has said Moet Hennessy cancelled profit-sharing bonuses and other annual benefits this year, while LVMH has kept shareholder dividends stable.
Profit-sharing schemes are common in France’s wine and spirits industry and often represent a chunky portion of workers’ annual pay of up to 15% in good years, labour representatives say.
($1 = 0.8383 euros)
(Reporting by Tassilo Hummel. Editing by Jane Merriman)
Comments