Remy move shocks Champagne world

Rémy Cointreau has surprised the Champagne world by announcing it has entered into exclusive negotiations with privately-held company EPI with a view to possibly selling its loss-making Champagne division, including the Piper-Heidsieck and Charles Heidsieck brands.

While most industry observers anticipated bids to come in from established players in the Champagne region, EPI only counts a single, relatively unknown Château among its existing assets.

Although powerhouses LVMH and Pernod Ricard ruled themselves out of the bidding soon after Rémy Cointreau announced its intention to sell off the Champagne arm, rumours of interest from the likes of Nicolas Feuillatte and Boizel from the Champagne region itself, plus Davide Campari, suggested that an established drinks company would take over the brands.

Analysts value the Champagne unit at around €400 million – roughly four times its sales.

The division had sales of sales of €97m in 2009/10 – 12% of the group total.

It has promised to break even this year after suffering an operating loss of €4m last year amid the global economic turmoil.

Analysts believe its inventories of 40 million bottles – four years worth of stock – and its 800 hectares of vineyards made it an attractive target in a Champagne sector known for its strict production criteria.

EPI, a family owned group run by Christopher Descours, owns a number of French trademarks in the upmarket goods market, such as J.M. Weston, Bonpoint, Alain Figaret, François Pinet and Michel Perry, as well as Château La Verrerie. EPI also carries out a diversified investment policy.

In the event of a favourable outcome to the negotiations, the conclusion of a sale agreement would only occur after consultation with employees, representative bodies and authorisation from the board of directors of Rémy Cointreau SA.

Completion of the sale will remain subject to the authorisation by relevant competition authorities.

Concerns that introducing brand owners who were not based in the region into the Champagne industry were yesterday rejected by Ruinart chef de cave Frédéric Panaïotis, who has worked under Paris-based LVMH for both Veuve Cliquot and his current employer Ruinart.

“So long as the vineyard and winery management teams are based in the region, then there is no problem,” he insisted.

“If the right level of expertise is in place at the heart of the winemaking operations then there is no reason why the owners need to be based in Champagne.”

Alan Lodge, 02.03.2011