UK: Drambuie Liqueur Co sales struggle to recover
- Sales struggle in Greece, US
- Group swings to net losses for year
- Plans launch of Drambuie 15 in premium push
Drambuie Liqueur Co upbeat on prospects
Sales of Drambuie, the Scotch whisky liqueur, have struggled to regain ground lost during the height of the global economic crisis.
Drambuie Liqueur Co saw net sales slip to GBP19.2m (US$30.6m) for the 12 months to the end of June, compared to GBP19.3m in the previous year, the firm said late last week. Lower sales of whisky undermined a 1% rise in the value of Drambuie case sales.
While the firm was upbeat on its performance, it failed to make up for a 12% drop in sales of Drambuie in the previous year.
A 27% leap in volume sales in the UK during the 12 months was also tempered by lower consumption in Greece and the US. Drambuie consumption has collapsed in Greece, the group's third largest market by volume, during the country's financial crisis.
One-off charges and payments caused Drambuie to swing to net losses of GBP1.5m for the year, compared to profits of GBP1m in the previous year. Charges included a GBP1m payment set aside as part of a five-year bonus scheme for selected employees. The group also spent GBP1.7m on redesigning and marketing its new bottle design.
Drambuie's CEO, Phil Parnell, remained upbeat on the performance: "Despite the ravages of the global recession," he said, "we have made significant progress this year towards the rebuilding of the company.
"Volume and underlying operating profits have stabilised and the brand, with its new packaging and range extensions, looks in better health than for many years. With the exception of the problems in southern Europe, we look forward to further recovery in 2011.” Drambuie, he added, was free of debt and had GBP4.8m in cash.
Operating profits prior to exceptional charges were flat against the previous year, at GBP2.8m. However, after one-off items, the firm reported operating losses of GBP1.56m.
From January 2011, Parnell will become executive chairman of the firm, following the retirement of Richard Stone. Michael Kennedy, the current regional director for Southern Europe, will take on the role of managing director.
Parnell told just-drinks today (11 October) that Kennedy will initially focus on the core commercial business. The company plans to install Kennedy in the full CEO role in 2012, when Parnell anticipates a switch to non-executive chairman.
The company said that it intends to take its liqueur brand up the price ladder by introducing Drambuie 15 in travel retail later this month. Drambuie 15 will join super-premium The Royal Legacy of 1745, launched last autumn.
Drambuie Liqueur Co has switched its contract bottling and supply partner from Glenmorangie Co to Morrison Bowmore Distillers in the last year.
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