UPDATE: Wray & Nephew rum sales fall, Algix lawsuit hits sugar business
Wray & Nephew and Appleton rum sales are up globally but down 10 per cent in the local market, due to one-off events.
J. Wray & Nephew's sugar business has also been impacted by the court case with fish farming output Algix that has shuttered its spirits plant in St Elizabeth.
Sales in Jamaica totalled US$15.4 million, representing 4.7 per cent of total sales of Italian parent Campari Group.
"The case brought by Algix has had temporary effects on net sales performance. In particular, the sugar business farming operations have been impacted based on the court's ruling," said J. Wray & Nephew Limited (JWN) in response to Wednesday Business.
"The prevailing circumstances are expected to continue for the remainder of the year. We continue to work under National Environment and Planning Agency guidance to implement solutions which we anticipate will be implemented in time for the start of the 2017 crop year," the rum maker said.
The Jamaican rums portfolio reported overall organic growth of 1.6 per cent globally. Markets with positive performance included the United States, up 9.4 per cent, as well as Canada and the United Kingdom, and even markets where sales are still insignificant, stated the group.
On the negative side, sales in Jamaica were also said to be impacted by price speculation ahead of the presentation of the national Budget.
"The perceived contraction in first quarter 2016 was therefore as a result of the exaggerated first quarter of 2015 performance against this year's first quarter," JWN told Wednesday Business.
In April, the Court of Appeal upheld an injunction obtained by Algix Jamaica Limited against JWN in January 2016 barring Appleton Estate from discharging effluent that does not meet trade standards into two rivers in St Elizabeth, pending the resolution of a lawsuit. The trial is set for September.
Algix contends that effluent from the sugar estate entered its fish farm and affected its business and is seeking US$50 million in damages. JWN denies any causal link between its factory and Algix's alleged losses.
CORRECTION: This story has been updated to correct that the Algix lawsuit has affected the sugar operation and not rum sales.