LVMH Q1 spirits sales slip again due to China
Glenmorangie Scotch whisky owner LVMH saw its wine and spirits sales slide again during its first quarter this year due to continued destocking in China.
The wine and spirits sector was the firm’s only division that failed to achieve growth, reporting a decline in organic sales of 1% to €992 million which was attributed to the Chinese government’s on-going austerity measures.
However, LVMH recorded an overall increase in volume for its Hennessy Cognac brand as a result of the strong UK market.
Glenmorangie and Belvedere vodka also continued to grow during Q1.
“LVMH will continue to focus its efforts on developing its brands, will maintain a strict control over costs and will target its investments on the quality, the excellence and the innovation of its products and their distribution,” the group said in a statement.
“The group will rely on the talent and the motivation of its teams, the diversification of its businesses and the good geographical balance of its revenue to increase, once again in 2015, its global leadership position in luxury goods.”
LVMH has not been the only group to suffer the effects of the Chinese government’s austerity measures, with Diageo reporting last year that while sales managed to recover slightly, the slowdown in China, Russia and North America failed to return the group to growth.
Meanwhile, in the six months to September 2014, Rémy Cointreau saw sales slip 15.5%, which it blamed on the tricky Asia-Pacific market.
Pernod Ricard, however, did report a return to growth for the first quarter of its financial year.
Last month, Brown-Forman witnessed its net sales grow 1% in the third quarter of the year as its super- and ultra-premium brands surpassed the one million case milestone for the first time.