• Q1 sales fall by 2.3% to EUR263.7m (US$346.5m)
  • "One-off factors in China" hamper three months to end of June
  • Remy Martin Cognac sales dive by 12.9% to EUR149.3m
  • Inventory destocking expected to affect Q2
Remy Cointreau has posted a slip in Q1 sales

Remy Cointreau has posted a slip in Q1 sales

Remy Cointreau has posted a slip in second-quarter sales, as recent changes in the spirits market in China made their presence felt.

The company, whose drinks portfolio is dominated by the Remy Martin Cognac brand, said earlier today (18 July) that group sales in the three months to the end of June fell by 2.3% on the corresponding period a year earlier, coming in at EUR263.7m (US$346.5m). Sales of Remy Martin decreased more markedly, by 12.9% to EUR149.3m.

Remy said that its Q1 performance was "adversely affected due to one-off factors in China". The introduction of a clampdown on gifting to civil servants and ban on alcohol at luxury banquets, introduced late last year, has already hit the performance of Remy's main Cognac competitor in the country, Pernod Ricard.

Despite the touch conditions in China, Remy Martin sales benefited from improved momentum in the spirits market in the US, while European sales for the brand were stable, thanks to Russia and the UK.

Remy's other spirits and liqueur brands, including Cointreau and Mount Gay rum, delivered a collective 13% jump in sales in the quarter, to EUR57.8m.

A 20.5% leap in sales of 'partner brands', which came in at EUR56.6m, was credited to sales growth in the US.

"Rémy Martin is likely to remain adversely affected by continued inventory destocking in the second quarter ending 30 September 2013," the company warned. "Nevertheless, the group remains confident in the medium and long-term in Asia and particularly in China, and considers that the slowdown is due to measures focusing on conspicuous behaviour, which does not detract in any way from the brand’s exceptional fundamentals."

The company will release its half-year sales results on 17 October.

To read the company's official statement, click here.