Krug Champagne Bought by LVMH

Jan 21, 1999
2:30 p.m. EST

The acquisition-hungry Bernard Arnault, head of luxury goods conglomerate LVMH Moet-Hennessy Louis Vuitton, has acquired Krug from French liquor group Remy Cointreau.

According to today's announcement, LVMH paid a magic number -- one billion francs ($175 million) -- for the world-renowned Champagne brand, founded in 1843.

Krug was bought through LVMH subsidiary Moet-Hennessy, reinforcing LVMH's position as the world's largest Champagne company. Moet owns such luxury brands as Moet & Chandon and its prestige cuvee Dom Perignon. LVMH also owns several other Champagne brands: Veuve Cliquot Ponsardin, Canard Duchene, Ruinart, Mercier and Pommery.

LVMH said that the Krug family will continue to manage the Champagne house, which has 50 acres of vines and produces at least 42,000 cases annually of highly distinctive wines, many vintage-dated, including the elegant vineyard-designated Clos du Mesnil.

The steep price paid by LVMH can be attributed to a strengthening market for prestige wine brands, but also to Krug's huge stock of mature and maturing Champagnes, estimated at about 300,000 cases. Under the direction of brothers Henri and Remi Krug, the house has pursued a policy of quality. All Champagnes in Krug's lineup (except Krug Rosi) age for at least six years on their lees, or sediments, in the cellars before release, making them distinctively rich and flavorful. Krug bottlings age beautifully for over a decade after release, and have a cult status among aficionados who are willing to pay triple-digit prices for these exclusive wines.

With this new trophy, Arnault takes another step toward his goal of making LVMH the world's foremost luxury brands company. In 1996, LVMH made an offer to buy Chateau d'Yquem, the world's most famous sweet wine estate, for 503 million francs (more than $100 million at the time)--a seeming bargain compared to the Krug acquisition. That deal has been held up in the courts. Last year, Arnault himself and a Belgian associate bought Chateau Cheval-Blanc, the famed Bordeaux estate. Arnault also received much media attention this month after LVMH increased its stake in the Italian luxury-goods company Gucci, reportedly with the intention of gaining control of the firm.

Remy Cointreau, which owns the Remy Martin cognac and Cointreau liqueur brands, said in a statement on Thursday that the sale of Krug fit with the company's strategic plan and will be used to pay off debt. The company has been struggling as of late due to slumping cognac sales and an unprofitable distribution network. Last September, Remy Cointreau agreed to sell another Champagne brand, Venoge, to LVMH. However, in the statement, the company said it intends to hold onto and develop its two remaining Champagne brands: Charles Heidsieck and Piper-Heidsieck.

For more on LVMH:

  • October 23, 1998
    Chateau Cheval-Blanc Sold to LVMH Chairman and Belgian Businessman

  • November 30, 1995
    The Billionaires: Bernard Arnault

    For more on Krug:

  • October 20, 1997
    Krug Breaks Tradition With a Trio of Vintage Champagnes

  • September 30, 1997
    Fantasy, Reality And Champagne

  • December 31, 1997
    Champagne Gets Serious

  • News

    You Might Also Like

    Haut-Brion Auction for a Cause Raises $6.23 Million

    Haut-Brion Auction for a Cause Raises $6.23 Million

    Prince Robert of Luxembourg opened his cellars to raise money for his PolG Foundation to …

    May 23, 2022
    Updated: Bordeaux 2021 Futures Prices and Analysis

    Updated: Bordeaux 2021 Futures Prices and Analysis

    Top wineries such as Angélus, Léoville Barton and Pontet Canet are releasing their futures …

    May 20, 2022
    Major Food Group Debuts Dirty French Steakhouse in Miami; Daniel Boulud Opens Le Gratin in New York

    Major Food Group Debuts Dirty French Steakhouse in Miami; Daniel Boulud Opens Le Gratin in New York

    The team of Mario Carbone, Rich Torrisi and Jeff Zalaznick are expanding their presence in …

    May 19, 2022
    Prince Robert de Luxembourg Auctions Wines Straight from Haut-Brion's Cellars for a Cause Close to Home

    Prince Robert de Luxembourg Auctions Wines Straight from Haut-Brion's Cellars for a Cause Close to Home

    The Sotheby's sale of rare collectibles—Haut-Brion, La Mission Haut-Brion and other top …

    May 18, 2022
    Destin Charity Wine Auction Raises $3.8 Million for Children in Need

    Destin Charity Wine Auction Raises $3.8 Million for Children in Need

    The northwest Florida event has become one of the country's largest, supporting 16 …

    May 11, 2022
    Instagram Live Chats: View Wine Spectator's Upcoming Schedule

    Instagram Live Chats: View Wine Spectator's Upcoming Schedule

    Our next two episodes feature American music trio and founders of Gaslighter Wine Co. The …

    May 24, 2022