Rémy Cointreau still reeling from China turndown
French spirits and liqueurs producer Rémy Cointreau has posted a significant sales decline of 15.5%, blaming the Asia-Pacific market that remains “adversely affected by the continued destocking in China”.
Achieving sales of €471.8 million in the six months to September, it is a marked decline from the €558m reached over the same period last year.
The Rémy Martin division of the company, which primarily focuses on the company’s Cognac offerings, suffered the most. It witnessed a 13.4% decline in organic sales – that figure being calculated without including the negative effects of currency fluctuation – and a 15.4% decline in real terms.
Cognac sales in China have plummeted across the category as the country continues in its anti-extravagance drive.
The loss of the US distribution agreement with Edrington – which previously saw Rémy Cointreau benefit from American sales of the whisky group’s leading brands like The Famous Grouse and The Macallan – accounted for a €45m hole emerging in the company’s results. It meant a 40.7% decimation of Rémy’s sales from partner brands.
Discounting Edrington’s departure in the US and global currency issues, the total organic figure for the company was still a 5.6% decline.
Encouragingly though for Rémy Cointreau, the company’s liqueurs and other spirits performed comparatively well, enjoying a 9.1% organic growth. Whisky brand Bruichladdich witnessed sales doubling (albeit from a low starting point), Metaxa reported double-digit growth and Cointreau performed well across all major markets.
According to a company statement, the outlook for the rest of the financial year is based on “delivering positive organic growth in both sales and current operating profit.”
However, it continued by saying that any targets should be calculated “excluding the contribution of the Edrington distribution contract in the US and at constant exchange rates.”