UK: Recession hits Drambuie sales
Destocking by drinks distributors has caused a 12% slide in full-year sales at Drambuie, the Scotch whisky liqueur group.
Drambuie said today that net sales for the 12 months to the end of June fell by 12%, compared with the previous year, due to a slowdown in demand in US, UK and Spain.
Operating profits also fell by 12% for the year, to GBP2.8m (US$4.4m), the group said.
Uncertainty over consumer demand during recession in the UK and US put the stoppers on new orders from drinks distributors, affecting both large and small players in the industry.
Drambuie CEO Phil Parnell said the economic downturn was only a "short-term setback" to Drambuie's rejuvenation strategy, begun three years ago.
"As a privately-owned company, we have the flexibility to use part of our cash reserves in additional marketing investment for the longer-term growth of the brand. Such investment may adversely impact the profit and loss account in the short term, but should lead to enhanced brand equity and shareholder growth beyond.
He added: "The company does not expect to see any further impact on volumes next year as a result of the supply chain cash squeeze."
Prior to the most recent fiscal year, Drambuie had turned operating losses of GBP1m in 2003 and 2004 into operating profits of GBP3.2m for the 12 months to the end of June 2008.
In June this year, Drambuie announced new packaging for its namesake liqueur brand, which followed shortly after the group said it had signed a strategic alliance with Scotch whisky group Morrison Bowmore.
To read just-drinks' recent interview with Phil Parnell, click here.
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