Stock Spirits warns of €10m profit shortfall

UK-based distiller Stock Spirits has issued a profit warning after a 15% alcohol duty hike in its main market of Poland created a “very tough” trading environment.

Although maintaining that its market share in Poland remained “strong and stable”, the company admitted that “very aggressive competitor pricing and promotional activity” following the duty hike in January had imposed “considerable pressure” on margins.

As a result, Stock Spirits warned: “Unless trading conditions improve, there is a risk that our full year results (Group EBITDA) could be between €5m and €10m below expectations.”

Stock Spirits has a 25-strong portfolio covering a broad range of categories, but is predominantly focused on vodka, with core brands including Czysta de Luxe,  Żołądkowa Gorzka, Stock Prestige, 1906 and Zubr.

Although its biggest markets are Poland, the Czech Republic and Italy – the group claims the largest market share for spirits in the first two countries and derives 60% of its business from Poland – Stock Spirits is based in the UK and since last year has been listed on the London Stock Exchange. Following its announcement yesterday, shares in the company plummeted by 24%.

Looking ahead, Stock Spirits predicted: “we believe that some level of disruption may continue into the early part of next year, after which we expect to see a return to more normal trading patterns.”