LVMH Struggles With Third-Party Champagne Sales In Russia

LVMH Moët Hennessy Louis Vuitton has declared it 'impossible' to control the final destination of its products sold by third-party distributors, following reports that its champagne is being sold in Russia despite the company halting business there after the invasion of Ukraine in 2022. The group asserts that it relies on a network of indirect distributors, making it challenging to track where products ultimately end up. Notably, shipments are reportedly reaching Russia via US duty-free distributors, categorized as 'special orders.' LVMH emphasizes that it and its partners comply with all applicable laws and international sanctions. The luxury goods market continues to face challenges, including the legality of parallel imports into Russia and shifting consumer demand in other markets. While affluent Russians remain significant consumers of luxury items, their contribution is minor compared to markets like China and the US.