By Ron Emler
The confidence expressed earlier this year by the world's largest wine and spirits groups is being borne out by latest sales figures.
In mid-October, Diageo said that its volumes and sales mix between July and the end of September confirmed that it was on track for annual organic profits growth of at least 7%.
Meanwhile, both LVMH and Pernod Ricard have issued strong trading updates. In the first nine months of this year, LVMH's wine and spirits arm, Mot Hennessy, achieved a 12% rise in organic revenues compared with the same period in 2005. Champagne volumes enjoyed sustained growth and expanding demand for the higher qualities. Dom Prignon grew strongly in Europe and Japan, while Veuve Clicquot was buoyant in the US.
Hennessy Cognac increased its sales by 9%, again with an improved product mix. LVMH said the company expects a very significant increase in its results in 2006'.
Pernod Ricard's net sales in the three months to the end of September were 5.6% ahead of the same period last year, despite adverse currency movements. Spirits recorded organic growth of 7.3%, but wine sales fell by 4.7%, with the UK and American markets badly affected.
The French group reported that all 15 of its strategic brands enjoyed powerful growth', with volumes up 2% and net returns rising 7%. Ballantine's Scotch enjoyed 27% sales growth, while Stolichnaya and Martell put on 25% and 22% respectively. Jameson, Malibu and Beefeater all enjoyed double-digit sales growth but Chivas Regal's sales slipped by 6% due to the postponement of some promotional activities.
Patrick Ricard, the chairman, said Pernod Ricard's first quarter sales meant he could confirm that the company expected net organic sales growth of between 4% and 6% in the full financial year and that net profits growth would be in double digits, excluding the impact of currency movements.