FINLAND. The Finnish state-owned spirits producer Altia has reported a +19.8% growth in net sales to €487.9 million in 2010. Profit tripled in the year, a result of the acquisition of the Renault Cognac brand from Pernod Ricard, the downsizing of expenses and strengthening of currencies.
The company said that it met its objectives for 2010 and that the new strategy was realised according to plan. The integration of the business operations purchased during the year went “smoothly”, supported by flexibility and good performances among the Altia staff.
Net sales decreased by -2.9% in domestic markets but increased by +51.8 % in foreign markets. The increase in the net sales was affected by eight months net sales originating from the acquisition, as well as the strengthening of both Swedish and Norwegian Krona.
Operating profit excluding non-recurring items was €32.4 million (2009: €11.6 million), and €32.6 million (2009: €15.6 million) including non-recurring items. Net profit for the period excluding non-recurring items was €24.9 million (2009: €1.3 million), and €25.1 million (2009: €5.3 million) including non-recurring items.
In Finland, the decline in alcoholic beverage sales continued last year due to increases in taxation in 2008 and 2009 and the challenging economic situation. The total sales decreased by -3.2%. Spirits sales declined by -5.4%, while wine sales remained almost at the same level as in the previous year, with a decrease of -0.2%. Excluding fortified wine sales, wine sales increased by +0.5%.
In Sweden, the development of total sales declined -1.2%, while spirits sales decreased -0.7%. Wine sales growth continued increasing by +3.6%, although the increase was more moderate compared to the last reporting period. The increase in sales in the comparable financial period was exceptionally strong due to the weakness of the Swedish Krona, which accelerated cross-border trade from neighbouring countries.
In Norway, the growth rate of the state monopoly sales was +1.6%. Spirits sales declined -2.1% and wine sales increased +2.0%. During the reporting period of 2010, the growth rate of the sales in Norway was the weakest after the end of 1980s. This is assumed to be deriving from active cross-border and tax-free trade.
In Denmark, spirit sales increased by approximately +4.0%, while wine sales remained constant and sales of bag-inboxes increased by +2% to +3%.
In Estonia, the domestic vodka market decreased by -13.5% and the level of grey market increased. The volume of the wine market remained unchanged and the price level of bag-in-boxes decreased.
In Latvia, the grey market of alcoholic beverages is estimated to stand at 40%. The volume of legal alcoholic beverage market decreased by -12.0%. Wine market increased by +3.0% and at the same time the price level decreased in all product categories. Stores reduced their product selection of alcohol beverages to attain more space for their own, often cheaper, products.
Going forward, the company expects its net sales for 2011 to increase by +5% to +8%, subject to the economic outlook and changes in alcohol taxation in different market areas. Operating profit is also expected to grow from the level of 2010.
