Date£º
2014-04-22 10:39 Source£º
www.harpers.co.uk Author:
Gemma McKenna Translator:
R¨¦my Cointreau has warned that full year profits may plummet by 35 to 40%, thanks to a fall in Chinese sales.
The spirits company, which makes R¨¦my Martin Cognac and Cointreau liqueur as well as Mount Gay rum, said the Chinese government¡¯s ¡°anti-extravagance¡± policy had negatively impacted on sales of premium spirits.
R¨¦my Martin Cognac saw organic sales slide by 20.8% for the full year to March 31, 2014, driven by China¡¯s disappointing performance, it said in an earnings statement. Sales of Cognac in the third quarter were down by 32%, hot on the heels of a 32% slump in quarter three. Total organic sales were down 10.7% to €1.03 billion for the year to March 31, 2014.
Aside from the government crackdown it is working to reduce stock levels in China, which is also affecting its bottom line, the firm said. Elsewhere in the world, R¨¦my Martin Cognac is performing well, with the US market showing an increase of 7.7%, with Russia, Japan and Africa also doing well.
Its liqueurs and spirits arm, which includes Cointreau, Mount Gay, Greek spirit Metaxa and Scotch whisky Bruichladdich, grew 3.3% organically.
Also in the fourth quarter, the group cancelled 1, 283,053 shares as part of the share buyback scheme, in order to reduce capital. At March 31, 2014, the share capital of R¨¦my Cointreau comprised 48,476,859 shares.
R¨¦my Cointreau competitor Diageo saw net sales drop 19% in Asia Pacific in the three months to March 31, 2014, announced today. It blamed the decline on political instability rather than the corporate gift-giving crackdown.