Tariff deal eases pressure on Rémy Cointreau
French firm Rémy Cointreau has lowered its estimates for the net overall impact of tariffs on profits from €45 million (US$52.6m) to €30m (US$35m).
The group’s estimate of €45m was announced in its first-quarter sales results, where it also revealed sales had grown by 5.7%. This estimate was another decrease from its previous expectations of €65m (US$76.1m).
The latest revision was prompted by the agreement made between the US and the European Union (EU), which established a 15% tariff rate as of 1 August. The EU was previously due to be subject to a 30% tariff.
The agreement has been criticised by trade bodies on both sides of the pond, who had hoped spirits would be excluded.
In the update, Rémy Cointreau reaffirmed its objective of mid-single-digit annual organic sales growth for the 2025-26 fiscal year.
The revised tariff estimate was for the US only, which the firm now expects to be impacted by €20m (US$23.4m), down from its previously predicted €35m (US$40.9m).
Its expectations for the impact of Chinese tariffs remain the same, at €10m. EU brandy and Cognac are currently subject to an average 32.2% anti-dumping tax in China.
It is believed that Rémy Cointreau has avoided the anti-dumping duty by signing a minimum price commitment with China’s Ministry of Commerce (Mofcom), although it has not disclosed further details.
Rémy Cointreau added that its estimates factor in the action plans to mitigate the negative effects of tariffs, which include increased investments in both the US and China to support depletions.
The revised estimates mean the firm now anticipates an organic decline in current operating profits of mid-single digits, compared with its previous expectations of mid to high.
It added: “The United States and China are strategic markets for Rémy Cointreau, where the group has benefited for many decades from a strong local presence and solid brand desirability.
“Confident in their long-term potential, Rémy Cointreau intends to continue making targeted and ambitious investments in both markets to support the rebound in demand and lay the foundations for a sustainable and profitable growth trajectory.”
Related news
Rémy Cointreau backs zero-ABV brand as Q1 sales rise
