France Food and Drink Report Q3 2009

Publication Date	June 2009
Publisher	Business Monitor
Product Type	Report
Pages	78
ISBN Number	not applicable
Product Code	BMI02214

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Summary

France is home to four of the world's largest drinks firms - Pernod Ricard, Belvedere, LVMH and R?(C)my Cointreau. However, all four have been hit hard by the global economic downturn, and for several the downturn has come at a particularly inopportune time.

R?(C)my Cointreau reported an 11.6% decline in sales for the 12 months to the end of March 2009. Full year sales fell to EUR714mn with the firm hit by a 41% slide in sales in the fourth quarter of the year. This massive fall in Q4 was partly attributed to the exiting of the Maxxium distribution partnership, which in total led to a EUR50mn reduction in sales for the period. However, it was also hit by wholesaler destocking and by a fall in demand for premium drink varieties.

R?(C)my Cointreau has established a numerous set of bilateral agreements to replicate its distribution profile under Maxxium, including a deal with William Grant & Sons in the UK, a partnership with Roust in Russia, and an agreement with Suntory in Australia. However, there is a strong possibility that these agreements will take time to bed in, and this may lead to a difficult transition period. These difficulties could not have come at a worse time, having coincided with the economic downturn which has had a particularly marked impact on the super- and ultra-premium sectors in which R?(C)my Cointreau is focused.

Meanwhile, in the first quarter of 2009 Pernod Ricard raised EUR1bn through a rights issue, and a further US$575mn through the sale of its Wild Turkey Bourbon brand to Italy-based Gruppo Campari. The money is to be primarily used to pay down debts, which have ballooned following the EUR5.7bn acquisition of Absolut maker Vin & Spirit. This move pushed the firm's net debt to EUR12.96bn, which is larger than the firm's market capitalisation and almost 80% higher than the net debt of rival drinks firm Diageo. Sales of Absolut have been disappointing since the onset of the downturn and it can be argued that this move was poorly timed, having led to a massive rise in debts shortly before global credit conditions worsened.

LVMH's drinks business, which is centred on champagne and super-premium spirits, has also been hit hard by the economic downturn. In the first quarter of 2009 the unit's sales declined by a massive 22% in organic terms. This is in line with the Comit?(C) Interprofessionnel du Vin de Champagne reporting that champagne sales fell by 34% in the first two months of 2009. During the quarter, rumours emerged that the world's largest drinks firm Diageo is eyeing up a bid for LVMH's wine and spirits arm, and with this kind of sales contraction, LVMH must be wondering whether its drinks division is worth holding on to.

Content

Executive Summary
SWOT Analysis
France Food Industry SWOT
France Drink Industry SWOT
France Mass Grocery Retail Industry SWOT
Business Environment
Western Europe Food & Drink Business Environment Ratings
- Table: Western Europe Food & Drink Business Environment Ratings Q3 2009
France's Food & Drink Business Environment Ratings
Macroeconomic Outlook
- Table: France - Economic Activity
Food
Industry Forecast Scenario
Food Consumption
- Table: France Food Consumption Indicators - Historical Data & Forecasts
Prepared Food / Canned Food
- Table: Canned Food Value/Volume Sales - Historical Data & Forecasts
Confectionery
- Table: Confectionery Value/Volume Sales - Historical Data & Forecasts
Private Label
Functional Food
Trade
- Table: Food & Drink Trade Balance - Historical Data & Forecasts
Industry Developments
Market Overview
Food Production
Leading Players
Food Consumption
Prepared Food/Canned Food
Confectionery
Trade
Agriculture
Sugar Production
Organic Farming
Drink
Industry Forecast Scenario
Hot Drinks
- Table: Hot Drink Value Sales - Historical Data & Forecasts
Soft Drinks
- Table: Soft Drink Value Sales - Historical Data & Forecasts
Alcoholic Drinks
- Table: Alcoholic Drink Value/Volume Sales - Historical Data & Forecasts
Industry Developments
Market Overview
Soft Drinks
Hot Drinks
Alcoholic Drinks
Beer
Wine
Spirits
Mass Grocery Retail
Industry Forecast Scenario
- Table: France Mass Grocery Retail Market, Sales By Format (US$bn) - Historical Data & Forecasts
- Table: Grocery Retail Sales By Format
Industry Developments
Market Overview
Leading Players
- Table: Structure of France's MGR Market - Estimated Number of Outlets
- Table: Structure of France MGR Market - Sales Value by Format (US$bn)
- Table: Average Value of Sales per Outlet (US$mn) by Format
Competitive Landscape
Key Players
Food
- Table: Key Players in France's Food Sector
Drink
- Table: Key Players in France's Drink Sector
Mass Grocery Retail
- Table: Key Players in France's Mass Grocery Retail Sector
Company Analysis
Food
Groupe Danone
Nestl?(C) France
Drink
LVMH Group (Mo?<
Pernod Ricard
Mass Grocery Retail
Carrefour
Groupe Auchan
Groupe Casino
Appendix
Commodity Price Forecasts
Corn
- Table: Corn, 2005-2010
Soybean
- Table: Soybean, 2005-2010
Rice
- Table: Rice, 2005-2010
Wheat
- Table: Wheat, 2005-2010
Cocoa
- Table: Cocoa, 2005-2010
Coffee
- Table: Coffee, 2005-2010
Milk
- Table: Milk, 2005-2010
Sugar
- Table: Sugar, 2005-2010
Country Snapshot: France Demographic Data
Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education and Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
Section 3: Labour Market and Spending Power
- Table: Employment Indicators, 2000-2005
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012
Food & Drink Business Environment Ratings
Ratings Methodology
Ratings Overview
Ratings System
Indicators
Limits of Potential Returns
Risks to Realisation of Potential Returns
Weighting
- Table: Weighting
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing