The booming Cognac sector looks set to be the next battleground for drinks brands and retailers, as multiple grocers look to sell own-label Cognacs at an 80% discount to their branded counterparts.

A recent rise in brandy sales - TNS figures show the market up 30% to £48m in the past 12 months - has sparked retailers' interest in the once-ailing category.

Branded XO and VSOP premium-level Cognacs sell for between £80-100 on average in the UK off-trade for a standard 70cl bottle. But retailers such as Tesco have announced they are to launch own-label equivalents for as little as £19.99.

Other retailers, including Asda and Morrisons, say they will follow suit. "We are seeing double-digit growth on Cognac. However, own-label participation in the category so far is very low, at just 10%," said Harvey Lees, spirits buying manager for Asda. "To combat this we will be introducing an XO Cognac to our Extra Special range later in the year."

Morrisons said it will be launching either an XO or a VSOP Cognac into its The Best range in a matter of months. "We've seen a surge in sales of premium spirits in general, both brown and white, and Cognac has been part of that," said John Spurs, Morrisons' licensed trade director. "I think it is part of the more general trend in the growth of premium food and drink and of premium own-label ranges. We are in the middle of developing a Cognac to benefit from this."

Top-selling Cognac brands, such as Pernod Ricard-owned Martell for example, which sells its XO for around £110 a bottle, are preparing themselves.

"With Martell we tend to concentrate on the more specialist and high-end retailers so it shouldn't affect us too much," said Chris Seale, head of Champagnes and Cognacs at the group.

All the major retailers say they expect growth in the sector to continue. Asda and Waitrose are both expecting double-digit growth over the next 12 months.

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