When Luxury Starts to Burn: Moët Hennessy’s Crisis and the Future of Fine Wine

May 14

Written By Michele Edington (formerly Michele Gargiulo)

There’s something eerie about watching giants fall.

Moët Hennessy, once a towering pillar in the world of luxury wine and spirits, is now doing something few expected: losing money.
A lot of it. €1.5 billion worth of it.

This is the division of LVMH that once printed cash like vintage labels. It was the heartbeat of Champagne dinners and gilded Napa tastings. And now? It’s bleeding…quietly, strategically, and with a scent of desperation in the air.

But this isn’t just a story about one portfolio’s downturn. This is a reckoning for luxury wine as a whole. For how we buy it, why we crave it, and what happens when opulence stops selling.

Let’s uncork the details, and sip slowly through the collapse.

From Overflow to Overburn: What Happened at Moët Hennessy

In 2019, Moët Hennessy was a juggernaut. It generated €1 billion in free cash flow, a testament to global thirst for prestige. Their brands?
Legendary. Dom Pérignon. Veuve Clicquot. Armand de Brignac. Hennessy itself.
Names that glowed in ice buckets from Paris to Phuket.

But by early 2024, the story had flipped.

Instead of earning, they were spending. Hard. Reports show the division burned €1.5 billion…the kind of reversal that sends quiet shudders through even the most diamond-studded boardrooms.

Why you might wonder. Well, aggressive price hikes that alienated even affluent consumers, underperforming acquisitions (including Jay-Z’s Armand de Brignac and Napa’s Joseph Phelps), costly pivots to DTC (direct-to-consumer) sales that flopped, and luxury fatigue post-COVID, as consumers traded labels for experiences. There isn’t just one answer, but a combination of a bunch that hits hard.

The gilded bottle had cracked and the sparkle had gone flat.

Luxury Wine in the Age of Disillusionment

Once upon a time, drinking Dom Pérignon felt like drinking prestige. A glass of Veuve was a ticket to something exclusive, even if only for a moment.

But now? There’s a shift.

Consumers (especially Millennials and Gen Z) are becoming label-resistant. They want stories, not just logos. Sustainability, not just sparkle, and they’re reaching for biodynamic vineyards, obscure regions, and wines that whisper instead of shout.

You can see this shift in the rise of regions like Valle de Guadalupe…a Mexican wine country where elegance comes with dust and soul. You can feel it in the quiet prestige of L’Épiphanie de Pauillac, a Bordeaux wine released without fanfare by a Premier Grand Cru château, priced for accessibility, not ego.

In other words, luxury is evolving. And Moët Hennessy, once the face of opulence, was caught clutching yesterday’s playbook.

The Curse of the Overbuilt Portfolio

Moët Hennessy didn’t just sell Champagne, it assembled a constellation of brands meant to dominate every price point and demographic.

But luxury doesn’t scale well. It doesn’t bend easily to algorithms or marketing quotas, and many of their acquisitions (like Joseph Phelps or Jay-Z’s Armand de Brignac) came with high expectations and steep margins.

Sadly for them, those margins collapsed.

And like Duckhorn’s decision to shutter Paraduxx, Moët Hennessy began rethinking its family tree. Streamlining, cutting costs, the usual business tactics, and in the process, revealing a painful truth: not all prestige survives disruption.

What This Means for Wine Lovers

For consumers like us, this moment is bittersweet.

We’re watching the wine world crack open, and that’s a little scary. But inside the rupture is something truly thrilling, a democratization of excellence. No longer do you need a $300 bottle to drink something extraordinary, you just need curiosity. A good importer and a vineyard that cares more about soil than sponsorships can be all you need to seek out.

It’s what we explored in how wine is evolving in a post-climate change world: terroirs are shifting, yes, but so are hearts. People want meaningful wine now, not just marketable wine.

So let Moët Hennessy recalibrate, let the old systems buckle, something honest is rising from the roots.

According to internal sources, LVMH is cutting roughly 1,200 jobs, reevaluating direct-to-consumer efforts, slowing their acquisition strategy, and focusing on top performers only (like Hennessy and Dom Pérignon).

But even their top brands are seeing a softening demand. Champagne shipments are down globally, China’s luxury market has cooled, and even in the U.S., shelf space is being claimed by innovative new producers, not legacy labels. The empire will survive, it always does, but the moat around the castle is shrinking.

What About Jay-Z’s Champagne?

A key flashpoint in this drama is Moët Hennessy's purchase of 50% of Armand de Brignac…aka “Ace of Spades,” the brand made famous by Jay-Z.

They paid a premium for star power.

But the Champagne didn’t move. It sat. The street cred didn’t translate into shelf cred, and when you’re trying to sell bottles for $300+, even a little dust is dangerous.

It’s a lesson: celebrity doesn’t equal loyalty. And luxury must still taste good…especially now that consumers are researching every bottle they buy.

We’re entering a new era, an era where quiet prestige wins. Where a winemaker in Finger Lakes or Patagonia can earn more reverence than a Champagne house with gold labels.

What will rise now? Well, some are already starting to in the wake of the flop. Story-driven wines from regions like Portugal, Armenia, and Slovenia, transparent sourcing and ethical growing practices are becoming more and more desirable. Accessible elegance, like L’Épiphanie de Pauillac or cooperatives in Southern France are starting to take off. Natural winemakers with micro-batches and cult followings, and wines that travel well in both flavor and philosophy.

The age of wine as status symbol is fading, the age of wine as a beautiful story is arriving.

For Those Who Still Celebrate

Even in this shift, there’s still room for celebration. If you’re drinking a Pauillac, or a goodbye bottle of Paraduxx, or simply sipping something cold on your front porch, this set of handblown Champagne coupes adds beauty without pretension.
A reminder that luxury doesn’t have to cost your soul.

This isn’t just a corporate cautionary tale, it’s a cultural turning point.

We are watching the wine world rewire itself…from top-heavy prestige to bottom-up beauty. From glass towers to dirt roads and from brand worship to bottle intimacy, this change is long overdue in my opinion.

Moët Hennessy will recover, reshaped and leaner than ever before, but the message is clear: you can’t sell status without substance anymore. And for the rest of us, the ones who drink to remember, to slow down, to feel something, it’s a liberation.

Drink what moves you.

The giants are falling, and the vineyards are still growing.