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Remy shows the right spirit against counterfeiters

Clifford German
Tuesday 17 January 1995 00:02 GMT
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Distillers such as Remy Cointreau and United Distillers are spending.around 4p a bottle to produce one-way valves in the necks of bottles that let the real stuff out but defy attempts to refill them.

The move is the latest campaign to defeat the counterfeiters who have perfected ways of drilling holes in genuine bottles to refill and reseal them.

Sales of cognac rose 4 per cent over the past year and Remy Cointreau maintained its prices and its market share. But measures to counter counterfeiters cost the best part of Fr20m (£2.5m) in the six months to September, and helped to limit pre-tax profits to Fr135.4m.

Sales rose by 8 per cent to Fr2.9bn and operating profits by 10 per cent to Fr394m. Exceptional profits from asset sales almost quadrupled to Fr52m but financial charges rose by almost a quarter to Fr311m, with the currency costs caused by a drop in the dollar outweighing savings on interest charges.

Analysts said the figures fell well short of expectations and the shares went into a nosedive on the Paris bourse yesterday. They fell Fr10 to Fr175 in early dealings. Cognac remains the principal source of profit, although wines and spirits and the distribution of brands such as Famous Grouse whisky from Highland Distilleries are steadily increasing.

Champagne profits are set for a comeback once the last of the expensive grapes bought in the late 1980s have moved through the production, maturing and sales process and the cheaper 1990s grapes start moving through the pipeline on to a recovering consumer market.

At the nine-month stage sales were running 7.5 per cent up at Fr5bn francs and brothers Francois and Marc Heriard Dubreuil, from the family that controls the group, believe profits are on course and figures for the full-year will match forecasts, provid e d the crucial fourth quarter, which contains the Chinese New Year, comes up to scratch.

China and Hong Kong alone account for 20 per cent of cognac sales worldwide. China has recently taken steps to close the duty-free import shops that allowed Chinese to cross the border by the million and bring in alcoholic drinks on a scale that makes the cross-Channel run look like very small beer.

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