Rémy suffers loss of Edrington deal in the USBy Amy Hopkins
Rémy Cointreau has continued to see its sales slide in 2014 as its namesake Cognac brand battles a slowdown in China and the loss of a distribution deal with Edrington in the US bites.
Announcing its first quarter results for 2014, the French drinks group revealed sales of €214.8 million, an organic decrease of 5.7%.
The group has been struggling to battle a long-running crackdown on hedonistic gifting and banqueting in China, a move that has led to a slowdown in the country’s Cognac market.
As such, the company has undertaken a destocking effort of its Rémy Martin Cognac in the region, meaning its sales have continued to drop in 2014, falling 15.3% from April to June.
In 2013/14, the brand suffered a sales decline of 20.8% to €551.2m and a massive operating profit decline of 46.9% to €125.4m.
Rémy Cointreau suffered another blow in May this year when The Macallan and Brugal rum producer Edrington terminated its US distribution contract with the group, setting up its own wholly-owned sales, marketing and distribution company.
It is estimated that this termination has caused Rémy Coiuntreau to lose €27.0m. It’s remaining partner brands now include Piper-Heidsieck Champagnes, some of William Grant & Sons’ spirits and Russian Standard’s range of vodkas.
With regards to its other spirits and liqueurs brands, including Bruichladdich Scotch whisky, Mount Gay rum and Cointreau liqueur, the group witnessed an 11.3% organic growth.
A particularly strong performance was noted for Bruichladdich, with sales doubling in the first quarter.
Despite continued declines, Rémy Cointreau confirmed its full year 2013/14 financial results statement that it expects to achieve organic growth in both sales and operating profit in 2014/15.