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Rémy Cointreau sales continue to fall
French firm Rémy Cointreau saw sales fall by 23.5% in its third-quarter results for 2023/2024, with a double-digit decline expected for the full year.
In the first nine months of the fiscal year, the company generated sales of €956.6 million (US$1.36 billion), representing a 22.7% organic revenue decline (26.7% on a reported basis).
The Cognac division was particularly affected, with sales down by 33.9% on an organic basis. In the first nine months of the fiscal year, Cognac generated €613.2m, down by 35.6% on 2022/2023. The company cited “major destocking in China and a persistently sluggish market in the United States” as the reasons behind the decline.
Its liqueurs and spirits division grew by 4.3% on an organic basis compared with Q2, but fell by 2.2% compared with the previous year. The company attributed its organic growth to US sales of The Botanist gin and Cointreau.
Partner brands were also down by 13.% on an organic basis, “affected by trends in the Benelux and the United Kingdom”.
By region, sales in the Americas fell slightly, following a strong performance in the second quarter. In the US, the company cited “a fiercely promotional environment and a rise in interest rates”.
Shipments in Asia Pacific and Europe, the Middle East and Africa (EMEA) fell sharply.
Rémy Cointreau now expects a sales decline of around 20% for the full year.
The company also announced a cost-cutting plan estimated at €100m (US$108m). It also vowed to “maintain a strict and uncompromising pricing policy” and to reduce marketing spend, particularly for Cognac.
Earlier this month, China launched an anti-dumping investigation into EU brandy, which could further Rémy Cointreau’s troubles.
In its results, the company stated that it was “cooperating fully with the Chinese authorities in this investigation… The Group is convinced that its products and business practices comply fully with Chinese and international regulations, and is approaching future discussions with confidence and diligence.”