WINE INTERESTS FAIL TO DENT ALLIED DOMECQ RESULTS

Published: 23 July, 2008

By Jack Hibberd

Allied Domecq, the world's second largest wine and spirits group, released better than expected first-half results last week, despite fears that its extensive wine interests would damage profits. Philip Bowman, Allied Domecq's chief executive, had been coming under fire from City analysts for spending 1 billion in the past few years on wine acquisitions - including New Zealand's Montana and Spain's Bodegas y Bebidas. This criticism intensified when big players in the wine world, such as Mondavi and Southcorp, released disappointing results earlier this year. Bowman claimed last week, however, that Allied's brands had escaped the massive price cutting that has afflicted other big players. Allied's results from its wine division showed organic growth of 5%. The big successes in the six months to 23 February were Tia Lusso, the newly-launched cream liqueur partner to coffee liqueur Tia Maria, Tequila brand Souza and coconut rum, Malibu. Bowman has, however, ruled out an approach for troubled Southcorp. Clearly, Southcorp is in something of a mess. I think it would be a brave person who waded in there at the moment,' he told the Financial Times. Excluding exceptional charges and goodwill, Allied's profits rose from 251 million to 256 million. Turnover rose 5% to 1.79 billion. .

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