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Wine performance down at LVMH
Champagne may be doing well compared to other wine categories, but its performance wasn’t strong enough to stop the owner of Moët & Chandon and Veuve Clicquot, LVMH, from losing revenue from its premium wines and spirits division.
LVMH recorded a 5% change in revenue and a 7% profit from recurring operations, in the first half of 2008. But its wines and spirits division reported a 2% drop in revenue, from €1.314 billion to €1.292bn, following a weak first quarter. Other divisions of the luxury group grew by between 6-8 %.
Bernard Arnault, chairman and CEO, said the overall market trends in Europe are positive with emerging markets such as Russia, China and the Middle East recording sustained growth. Its Champagne business continued to be driven by Veuve Clicquot and Moët & Chandon but Ruinart also saw strong growth. New World wines registered “good progress” while Hennessy cognac revenue was boosted by its premium products in China and Russia.
Despite the “uncertain economic and monetary environment”, Arnault stuck to his forecast for a “tangible” increase in full-year results. Last year, net profits rose by 8% to €2bn.
Fionnuala Synnott 30/07/08