Major Sale Bubbling in Champagne
Rémy Cointreau is shopping its Charles Heidsieck and Piper-Heidsieck Champagne brands
Late last year French conglomerate Rémy Cointreau made the surprise announcement that it intended to sell its Champagne division, comprising the Charles Heidsieck and Piper-Heidsieck brands. The group’s chief executive officer, Jean-Marie Laborde, indicated that with the sale of the two labels, as well as almost 125 acres of vineyards owned by Rémy in Champagne, they expected to raise “several hundred million euros.”
The announcement created a great deal of buzz about possible buyers, particularly in the close-knit Champagne community. Insiders speculate that other French conglomerates might show interest, such as LVMH, which currently owns multiple luxury Champagne brands including Moët & Chandon and Veuve Clicquot, or Vranken-Pommery, which already owns the third, more value-oriented Heidsieck brand, Heidsieck Monopole. Other sources have told Wine Spectator that they wonder if anyone in Champagne currently has the capital necessary to purchase these brands. Looking abroad, possible buyers might include the ever-expanding Diageo or Asian investors.
Both brands are well-respected names, with top cuvées from each producer regularly receiving classic scores (95 to 100 points on Wine Spectator’s 100-point scale). Piper-Heidsieck’s sales volume is considerably larger than Charles Heidsieck’s though, about five times as much, making it the third most exported Champagne brand. Rémy Cointreau officials have said that they would be willing to sell the brands and vineyards separately if the price was sufficient.
Rémy Cointreau consists of three divisions: Champagne; Cognac, including Rémy Martin Cognac; and Liqueurs & Spirits, encompassing Cointreau liqueur and Mount Gay rum, among others. While the Cognac and Spirits divisions’ revenues soared in the 2009-2010 fiscal year with operating profits of 105.9 million euros (about $139 million) and 51.5 million euros ($67 million), respectively, the Champagne division reported an operating loss of 4 million euros ($5.25 million).
Global Champagne sales grew by 7.5 percent by volume in 2010 and Rémy reports an 11.7 percent growth for their brands in the six-month period ending Sept. 30, 2010, but clearly their Champagne division has been an underperformer. “In our opinion the significant capital resources required [for the Champagne division] could be more efficiently employed in our other businesses,” Laborde said in a statement.
This redistribution of Rémy’s resources will likely see the group pushing further into the Asian market, particularly with their Cognac division. Shipment volumes of Cognac to China grew by 54 percent through November 2010. Although Asia already accounts for more than 50 percent of Rémy’s Cognac business, it is likely execuitves see greater opportunity for market expansion there.
After their initial announcement in mid-November, Rémy Cointreau executives have offered little on the details of the sale, though Laborde has said that there has already been considerable interest in the sale from bidders. Rémy was expecting to receive non-binding offers by the end of December, but no further information has been released to date.
Moët Sells Montaudon Label
While Rémy has yet to find a buyer, Champagne’s largest producer, Moët, part of LVMH, is selling it’s Montaudon brand to rival house Jacquart for an undisclosed price. The sale reportedly includes the brand, a production site and stocks. Moët purchased Montaudon less than three years ago, in late 2008, as part of an effort to diversify its portfolio. Montaudon’s history stretches back to 1891, and the brand’s non-vintage brut has routinely scored 90 points on Wine Spectator’s 100-point scale.
