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Fizz goes flat for LVMH as economy falters

Profits from the wine and spirits division took a hit as distributors destocked in the half.

Bernard Arnault, chairman and CEO of LVMH, commented: “The first half results once again demonstrate the exceptional appeal of our brands as well as the effectiveness of our strategy, particularly remarkable given the global economic crisis. Reassured by the good resilience in the first half of the year, the group approaches the second half with confidence.”

The wine and spirits group saw revenues of €1.08bn, down 16% from €1.29bn in 2008 while profit dropped over 40% from 2008’s €409 million to €241m in 2009.

”The difficult economic environment weighed on revenue and profitability of the wines and spirits business group. Champagne revenue was impacted by the high stock levels at distributors who destocked massively in the first half. With trends improving slightly in the second quarter, the Cognac business was more resilient and was supported by its Asian markets. While sticking to cutting costs and vigorously selecting its investments, the wines and spirits business group will continue its value strategy and maintain its strong culture of innovation,” says LVMH.

July 09

1 July 2009 - Felicity Murray