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Why the party's over for Rémy Martin
Sales of Rémy Martin brandy in China have plunged by nearly a fifth in nine months and things aren't likely to improve any time soon. It's all down to a clampdown on conspicuous consumption by the authorities. The company, Rémy Cointreau, has also reiterated there'll be a significant double digit decline in operating profit for the financial year.
Rémy Cointreau is blaming what it calls China's "campaign to promote morality" for the bad figures. The government there is cracking down on "excess" which has severely impacted the sales of high premium products. It also says that no significant recovery can be expected in time for the Chinese new year celebrations where one would normally see a healthy rise in sales. The Rémy brand has recorded what the company calls a "cumulative organic decline" of 18.3 percent since the start of the current financial year.
The company did say that the US and Japan recorded genuine growth and Europe continued to be "resilient". Shares in Rémy Cointreau were up strongly after its sales' statement was released. However the stock has lost more than forty percent since a peack in March 2013.
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