PARIS, June 21 (Reuters) – The French spirits business faces a troublesome 12 months as a consequence of geopolitical constraints, hovering inflation and COVID-19 restrictions in China, after gross sales staged a partial restoration in 2021, business group Federation Francaise des Spiritueux (FFS) mentioned on Tuesday.
“The 12 months 2022 is much extra advanced,” FFS Chairman Jean-Pierre Cointreau instructed reporters. “We recovered from the COVID-19 disaster however we are able to see that gross sales are at down 4% (in worth) within the 12 months to the top of Could in supermarkets, and down 7% between January and Could.”
Spirits exports, France’s second-largest sector after aerospace, had additionally recorded a fall previously few months, he mentioned. Final 12 months, they accounted for practically half of complete spirits gross sales by worth and had been up 30% at 4.9 billion euros ($5.18 billion).
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“In america we have now seen a pointy drop in gross sales since April as a result of rise in inflation (..) and in Asia it has clearly slowed down due to the sanitary measures,” Cointreau mentioned.
“It’s clear that geopolitics can be one of the crucial vital parameters within the coming 12 months,” he added, referring to the Ukraine warfare and tensions between China and Taiwan.
The US accounts for 44% of complete French spirits shipments in worth and Asia 29%.
In France, the place alcohol consumption has been in decline, gross sales volumes in retail outlets have stagnated in 2021 regardless of greater gross sales for white spirits like vodka and gin.
Gross sales rose in inns and eating places in France which had been shut in 2020 due to COVID-19 however they had been nonetheless nicely under pre-pandemic ranges, FFS mentioned.
Cointreau additionally pressured that decrease availabilities and better costs for gasoline, glass in addition to grains, used for spirits like vodka, had been elevating prices and considerations within the business.
It might additionally undergo from grain provide shortages as a result of Ukraine warfare and climate issues, that are anticipated to hit this 12 months’s grain manufacturing, he mentioned.
The FFS, which represents French producers and distributors of spirits drinks, encompasses 250 corporations, together with small companies and worldwide teams.
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Reporting by Sybille de La Hamaide. Enhancing by Jane Merriman
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