Bacardi has blamed “a combination of post-Covid challenges” including global conflicts, rising living costs and increases in alcohol duty for a dip in sales and profitability.
Revenues at Bacardi-Martini Limited – the company responsible for the marketing and distribution of tipples including Bombay Sapphire gin and Martini vermouth in the UK – declined by 1.2% to £281.8m in the 12 months ended 31 March 2024. Profits before tax, meanwhile, fell 2.8% to £4.9m.
“The UK market has been impacted by a combination of post-Covid challenges, ongoing global conflicts, and a tough economic environment marked by rising living costs,” said Bacardi-Martini director Vincent Morel. “These factors have led to a significant reduction in disposable income.”
Consumers were “making tougher choices on how to spend their available money” and there was a “general trend of moving away from spirits and buying more beer, wine and non-alcoholic drinks”, Morel said.
The overall spirits category had seen a 1.2% decline in the off-trade, and a 5.5% decline in the on-trade in the fiscal year covered by the results, he added.
This slowdown, Morel claimed, had “also been driven by the 10.1% increase in excise duty which was introduced by the government on 1 August 2023”.
Duty increases “impacted the selling and supplying pattern to some of our largest off-trade retailers and also the final retail price to the consumer”, he wrote.
Bacardi saw sales fall by 2.21% in the off-trade, “slightly behind the channel as a whole”, Morel said. Its on-trade performance was more positive, however, with “sell out” growth of 8% and ahead of the wider channel.
At a brand level, Bombay Sapphire had performed “in line with” the wider, declining gin category, Morel said.
Bacardi and Grey Goose, meanwhile, had held share in the off-trade, while both growing in the on-trade. “Competitive pressure” in premium tequila, however, had led to a decline in the performance of Patron in the on-trade.
A programme of “cost-saving measures” had helped maintain administrative costs and ensured profits after tax “remained stable”, falling by 8.9% to £3.6m, Morel noted.
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