Rémy Cointreau sales drop as Asia woes continue

Rémy Cointreau has experienced an organic sales decline in the first half of its financial year due to a number of “technical factors”, including the “adaptation” of its distribution channels in China.

On an organic basis, the French drinks group’s sales dropped 5.9%, however reported sales grew 6.1% in 2015/16 to €500.7 million.

The firm has blamed its organic decline on “high comparables” for its Cointreau liqueur, the end of Champagne distribution contracts in the US, and an “adaptation” of its distribution channels in China, where the group has struggled against austerity measures.

However, the organic decline slowed in the second quarter to -3.2%, compared to -9% in Q1. Rémy Cointreau expects this “positive trend” to continue in H2.

The group experienced “healthy” organic growth in the EMEA regions thanks to its expansion in Africa, as well as “strong momentum” in Central Europe and a “slight improvement” in Western Europe.

“Continued caution” among wholesalers in China spurred declines in the Asia-Pacific region, but overall the country experienced “gradual improvement”. The US remained the strongest market for Rémy Cointreau, maintaining “excellent” consumer demand.

Rémy Martin Cognac saw “excellent” sales in the Americas and EMEA, however struggles in Asia-Pacific meant the brand’s organic sales fell 3.1%.

In total, the group’s liqueurs and spirits division – consisting of Cointreau, Metaxa and St Rémy liqueurs, Mount Gay rum, Bruichladdich Scotch and The Botanist gin – declined organic sales by 8.3%.

Metaxa’s sales fell “significantly” in the time period due to slowdowns in Greece and Russia, but Mount Gay, Bruichladdich and The Botanist experienced “strong” growth. St-Rémy’s sales struggled due to a change of distributors in Canada.

“At the end of this half-year – in line with group forecasts – Rémy Cointreau confirms its objective of delivering positive growth in current operating profit for the 2015/16 financial year, at constant exchange rates and scope,” a statement from Rémy Cointreau read.

In its full-year financial results for 2014/14, the company reported net profit growth of almost 50%, however sales fell in the wake of its lost US distribution deal with Edrington.