Remy Cointreau's profits boosted by China's thirst for cognac
Source:
https://www.rte.ie/
7 Jun 2018
Remy Cointreau has reported higher-than-expected annual profits, helped by strong demand for its premium cognacs in China, and predicted more earnings growth this year.
The maker of Remy Martin cognac and Cointreau liqueur said its strategy of selling higher-priced spirits to boost profit margins was delivering strong results.
Remy has been focusing on selling spirits priced at $50 a bottle or more, as part of a strategy that has benefited from a rebound in Chinese demand.
Remy's strategy has differed from that of rival Pernod Ricard, which has launched less expensive brands in China.
The private consumption of drinks and spirits has been recovering in China, offsetting the impact from the country's anti-corruption crackdown over the past few years which had hit sales of premium brand drinks.
Remy Martin cognac, which makes 86% of group profits, achieved a margin of 26.9% of sales, representing an organic increase of 1.3 percentage points.
Remy Cointreau's stock market valuation is closer to that of many luxury good stocks, rather than food and drinks stocks.
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