bad luck for the Rémy Cointreau group

Rémy Cointreau spirits recorded disappointing results, with a drop in profits of almost 40%. What is happening to this group whose turnover exceeds one billion euros?

The overall turnover of the Rémy Cointreau group reached 1.2 billion but the group’s profit fell by almost 40% this year. The famous brand based in the town of Cognac sold significantly less well, in particular because of inflation. On the one hand, this inflation increased production costs, on the other hand it limited sales. Rémy Cointreau may well be positioned on high-end products, but lovers of cognac, rum, and even whiskey have been careful with their wallets.

But, the group also explains that in reality, it is a sort of return to normal after years of exceptional post-Covid sales. He observes an inventory adjustment in Asia, particularly in China, where growth is slowing, and also in the United States. However, these are the two countries where the group is most present. This is where the majority of its sales are made.

Éric Vallat, the boss of this family group founded more than 300 years ago, is betting on a gradual, gradual resumption of activity in the second half of 2024 and early 2025. The company has, however, made a savings plan of 145 million euros, without cutting into its workforce. Rémy Cointreau represents 2,000 employees worldwide, including 800 in France, with several production sites: in Angers for Cointreau, in Épernay for champagne, near Grenoble for whiskey…

But despite this expected recovery, one worry persists: the fear of Chinese taxes on cognacs. It’s even a sword of Damocles. As part of a commercial standoff with the European Union, China is threatening to tax imports of French spirits. Cognac therefore risks bearing the brunt of the dispute between Brussels and Beijing over exports of Chinese electric cars.

Anti-dumping investigations have been underway since January, in what appears to be a retaliatory measure after a Brussels investigation into Chinese electric vehicles. And it’s true that Rémy Cointreau has reason to be nervous, the surcharge on cognac could take effect as early as July.