ITALY: Exchange rate sinks Campari spirits
Campari said net sales fell 2% in its first half, as the Italian drinks group struggled to offset unfavourable exchange rates.
Campari sales dropped to EUR431m (US$649m) for the first six months of 2008. Revenue was flat, excluding exchange rate fluctuations, while spirits sales suffered a decline of 4.5%, compared to the same period last year. Pre-tax profits crept up 1.3% to EUR83.7m.
CEO Bob Kunze-Concewitz said the firm had achieved "solid results" in "a very tough environment", adding that performance improved during the second quarter and full-year guidance remained unchanged.
In spirits, the loss of the Tequila 1800 distribution contract in the US damaged sales, the firm said. There were also declines for its Brazilian brands and Cynar, which dropped 15.8% and 8.5%, excluding currency rate changes.
The Campari brand helped to limit the damage with growth of 4.8% at constant exchange rates, and 4.3% at exchange rates. The wines division, including the Cinzano brand, also increased sales by 5.6%. Soft drinks sales in Italy rose 1.8%.
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