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Rémy reels as Cognac holds back growth
Spirits producer Rémy Cointreau has posted yet another heavy sales drop based on the performance of its Cognac division, which receded almost twice as much as its liqueurs division grew.
The results, covering the nine months to December 31, revealed organic growth in Rémy Martin Cognac contracting a staggering 9.3%, losing €40 million on the same period last year.
However, a third quarter increase in shipments to China – the biggest source of trouble for Cognac brands that over-invested in the market – actually increased according to the company.
The third quarter saw a 0.4% growth for Rémy Martin thanks to this, but it follows two quarters that witnessed a staggering drop of 27%.
The Liqueurs and Spirits division enjoyed organic growth of 5.8%, bringing in an extra €11m for the company. Whisky brand Bruicladdich was the success story for Liqueurs and Spirits, with its sales doubling.
Overall, the company suffered a 4.1% organic sales decline, bringing in €30m less on the same period last year. This, not including the lost US distribution contract with Edrington, which expired in March last year.
The company is aiming to deliver “positive organic growth in both sales and current operating profit” by the end of this financial year, according to a statement.
It said, “The EMEA (Europe, Middle East & Africa) and Americas regions demonstrated good resilience over the period as a whole and the organic sales decline in Asia-Pacific eased markedly over the last few months, so that a level close to balance was recorded in the 3rd quarter.”