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Rémy Cointreau sales fall 22% in the US
The French spirits group revealed in its Q2 results that sales have tanked in the Americas as a result of “continued destocking”, and a “fiercely promotional environment”.
Rémy Cointreau, which owns brands including Rémy Martin, Mount Gay Rum and The Botanist Gin, reported total sales of €533.7 million in the second quarter of the financial year 2024-25. This is down 15.9% on an organic basis year on year.
Much of the slump is down to drastically reduced sales in the US, with sales in this market falling by 22.8% during the second quarter of the year.
In a company statement released today, Rémy said that ongoing destocking in the United States, especially for Cognac, had “continued to weigh on sales, in a market impacted by the normalisation of consumption and high interest rates, all in a fiercely promotional environment.”
Rémy claims that wholesalers in the US have been “keen to optimise their global inventories”.
Despite the depletions actually improving on the first quarter of the year, they still remained “well below expectations,” the group said, and as a result Rémy has adjusted its guidance for 2024-25, saying it expects there to be “no return to growth [in the Americas] before the fourth quarter of 2024-25 at the earliest” and that a “double digit” decline was expected in total sales worldwide.
The group admitted there was a “persistent lack of visibility on the timing of recovery in the United States”.
Cognac battleground
Prospects continue to be tough for the Cognac category, not least due to the punitive taxes slapped on European Cognac by China earlier this month.
Rémy revealed in its latest results that its total global Cognac sales fell by 20.7% in Q2, and said that it has “taken note of the provisional decision of the Chinese Ministry of Commerce (Mofcom) to apply additional duties of 38.1% on Cognac imports coming into China starting 11 October, 2024.”
“If this decision is confirmed,” Rémy continued, “the impact would be marginal for the 2024-25 fiscal year, and the Group would activate its action plan to mitigate the effects from 2025-26.”
The Bureau National Interprofessionnel du Cognac (BNIC) has called on the French authorities to protect the country’s brandy industry, calling the measure “catastrophic” for its industries and regions.
“Faced with this development, the French authorities cannot abandon us and leave us alone to face Chinese retaliation that does not concern us,” the trade body said. “As France and China celebrate the 60th anniversary of the re-establishment of diplomatic relations this year, everything must be done to avoid this outcome. We call on our government to finally take the necessary steps to put an end to this escalation, of which we are hostages and whose outcome is now more threatening than ever.”
Rémy Cointreau also owns Champagne Telmont, though no financial results specific to the Maison were revealed in its Q2 findings.
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