Hennessy, the cognac producer that is the largest brand inside LVMH’s drinks portfolio, has reached an arrangement with union representatives to compensate staff for bonus payments lost during the previous year amid soft sales, two sources said. The agreement is expected to be formally signed on Tuesday.
The accord calls for a one-off cash payment equal to 6.8% of an employee’s yearly salary, subject to a floor and ceiling. Workers will receive at least roughly 3,200 euros and no more than around 6,500 euros under the terms described by the sources.
Company spokespeople declined to comment on the negotiations, according to the sources. One person involved in the discussions, who asked not to be identified because the talks were private, said the settlement should prevent further industrial action.
"This means there will be no strikes," the source said.
The deal offers a contrast to the situation at other brands within the same drinks division. The CGT labour union has called for additional strikes at the champagne houses Moet & Chandon and Veuve Clicquot over bonuses that the union says were cancelled. Union leaflets distributed to staff indicate workers plan protests near the Paris offices of the drinks division, Moet Hennessy.
LVMH reported this week that profits at its drinks division, which is co-managed by Jean-Jacques Guiony and Alexandre Arnault, have fallen by half over the past two years. Cognac revenue has been especially affected, with tariff measures in the United States - Hennessy’s largest market by sales - cited as a significant headwind, alongside generally weak demand for alcoholic beverages.
The CGT has stated that Moet Hennessy removed profit-sharing bonuses and other annual benefits this year, while LVMH has maintained stable shareholder dividends. Profit-sharing arrangements are a common practice in France’s wine and spirits industry and, according to labour representatives, can account for a substantial portion of annual pay - as much as 15% in strong years.
(Currency reference provided in original reporting: $1 = 0.8383 euros)