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Jose Cuervo owner seeking ‘additional acquisitions’

Jose Cuervo maker Becle saw its 2018 second quarter net sales increase by 3.6%, as the Mexican firm “continues to review opportunities for additional acquisitions”.

Jose Cuervo producer Becle saw its net sales grow by 3.6% in the second quarter of 2018

The Tequila producer said net sales have grown to P$7,177 million pesos (US$384.04m) compared to the same period in 2017.

Operating profit decreased by 23% to P$1,661m pesos as a result of lower gross margin and higher advertising, marketing and promotion (AMP) spend. The firm increased AMP spend by 5.8% to P$1,721m pesos.

The US and Canada saw net sales fall by 0.4%, while Mexico grew by 17.1% boosted by “strong volume growth across Tequila and other spirits categories”.

Net sales of the rest of the world region increased by 11.9%.

In terms of brands, Jose Cuervo, which represented 36.2% of total net sales, saw its sales drop by 5%. The drop was attributed to lower volumes, which were partially offset by “higher average net selling prices”.

The wider Tequila portfolio – which includes 1800 Tequila – increased by 8% and represented 20.7% of total net sales

Other spirits brands, including Irish whiskey Bushmills and Three Olives Vodka, grew by 20.2% and represented 19.3% of total net sales.

During the second quarter, the Mexican drinks group invested P$116m pesos in capital expenditures.

“Net sales increased 4% during the second quarter, driven by continued favourable sales mix as a result of the strength of our premium spirits offerings that offset lower reported volumes compared to the prior year. Volume was lower than the second quarter of 2017 as a result of reduced distributor inventory levels,” the company said in a statement.

“Our recent acquisition of Pendleton Whisky performed well and we will continue to review opportunities for additional acquisitions across the global spirits industry.

“We remain well positioned in each of our markets and categories, and remain in a strong financial position with significant capital to successfully execute our long-term growth strategy.”

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