FRANCE: Champagne, Cognac dampen LVMH in '09

By | 5 February 2010

Lower demand for Champagne weighed heavily on French luxury goods group Moët Hennessy Louis Vuitton (LVMH) in 2009, despite signs of a recovery in the fourth quarter.

Wine and spirits sales fell by 14% on a like-for-like basis for the 12 months to the end of December, to EUR2.74bn (US$3.75bn), said the producer of Moet & Chandon Champagne, Hennessy Cognac and Glenmornagie Scotch whisky yesterday (4 February).

Sales were EUR3.1bn in 2008.

Profits from recurring operations in the wine & spirits division fell by 28% to EUR760m, from more than EUR1bn in 2008.

The downturn in demand, echoed by most other major Champagne and Cognac producers, weighed on LVMH as a group. It reported like-for-like group-wide sales down 4% to EUR17bn and like-for-like profits down 8% to EUR3.35bn for the year.

However, drinks sales "improved significantly" in the fourth quarter, said the group.

"Hennessy, which demonstrated good resilience in 2009, registered growth in the fourth quarter due to strong renewed momentum in the United States and in China," it said.

Drinks division Moët Hennessy is 34%-owned by Diageo.

Sectors: Spirits, Wine

Companies: LVMH, Diageo

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