Drambuie says Greek debt crisis hits demand for whisky lique

[JAB]

Drambuie says Greek debt crisis hits demand for whisky liqueur
Sales down 8% in Scottish company's third largest market

Whisky liqueur maker Drambuie said yesterday its annual volume sales to Greece dived by 8% amid economic turmoil in the Mediterranean country.

Greece is Edinburgh-based Drambuie's third most important market after America and the UK.

Demand for the drink among Greeks plummeted as financial woes hit the nation earlier this year leading to violent protests on the streets of Athens and other places.

The falling sales in Greece and a difficult market in the US offset a strong performance in the UK, where sales volume grew by 27%.

Turnover in the 12 months to June 30 was down slightly, at £19.17million, with Drambuie reporting pre-tax losses of £1.65million - after profits of £1.44million in 2008-09 - but also "a seminal year"? for the firm. It said: "A new packaging design for the core brand was rolled out from July 2009 to ensure that it was in all key markets prior to the peak Christmas period.

"Its introduction was accompanied by a significant investment in new TV advertising for the top four markets of the US, UK, Greece and Canada, which account for two-thirds of the brand's volume sales."?

Drambuie said it had also strengthened its global travel retailing, with the introduction of The Royal Legacy of 1745 - a super-premium expression of Drambuie - at the Cannes Tax-Free World Exhibition last autumn.

"The focus on this important sector of the business led to an overall volume growth in global travel retail of 11% in the year,"? the firm said.

In addition, Drambuie changed its supply arrangements during the period.

Whisky procurement, blending, bottling and warehousing plus customer services were transferred to Morrison Bowmore Distillers from the Glenmorangie Company earlier this year.

Chief executive Phil Parnell said: "We are absolutely delighted with this new business partnership, which is already yielding significant benefits to both parties.

"The quality of the product has been enhanced, there is a reduction in production overhead and we have secured synergy on distribution."?

Drambuie - whose underlying operating profits were flat at £2.8million - said its balance sheet remained strong, adding: "The company continues to be debt-free, with £4.8million of cash on hand. Tangible assets have increased by £1million as a result of the investment made in a dedicated bottling line at Morrison Bowmore.

"With the exception of the problems in southern Europe we look forward to further recovery in 2011."?


Article Courtesy of Press & Journal