Wray & Nephew rum sales surpass $6b at half-year
Sales of the Jamaica rum brands owned by Campari Group rose above €38 million ($6.1 billion) over six months ending June.
Through J. Wray & Nephew Limited, JWN, Campari holds the largest stake in the local market and as such, the performance of its brands, led by Appleton and Wray & Nephew, gives a measure of the activity in the overall rum sector.
Campari said Jamaica's sales increased 14.8 per cent in the first half of the year "thanks to the double-digit growth recorded in the period by all the main brands, such as Campari, Wray & Nephew Overproof, Appleton Estate and other rums and local brands, especially Magnum Tonic".
After factoring exchange rate movements, sales growth for Jamaica shrank to 4.5 per cent, the Italian company indicated in its earnings report.
The Jamaica market at €38.4 million, grew from €36.8 million a year earlier and remains the second-largest market in the Americas for Campari behind the United States, which generated €209.3 million. Canada generated €23 million, Brazil €16 million, and Argentina €11.4 million.
Globally, the Jamaica rums portfolio represented 5.1 per cent of total sales for Campari group. Sales from the local rum portfolio are up globally, but sales of the group are down some 4.4 per cent to €778.2 million as at June 2018. Despite the dip in sales, group net profit before tax increased to €166 million, up from €108.5 million a year earlier.
Slight negative performance
"Despite the good result in the United States and Jamaica, Appleton Estate recorded a slightly negative performance, mainly due to a slowdown in orders in Canada," said Campari.
"Wray & Nephew Overproof recorded a good result in the first half, thanks to healthy performances in Jamaica, the brand's core market, the US and the UK," the spirits company said.
Within the Americas, Jamaica's double-digit growth was only bettered in Mexico, where sales rose 16.1 per cent.
"The Americas region closed the first half with organic growth of 4.6 per cent driven by good performances by the US, up 5.9 per cent; Jamaica, up 14.8 per cent; Mexico, 16.1 per cent and other markets in the Americas region, which made up for the decline in Brazil and Argentina," said Campari.
JWN operates an estate in St Elizabeth, where it grows cane and distils rum. With reference to the ongoing legal case by fish farm operator Algix Jamaica Limited, claiming damage from effluent from the Appleton Estate, Campari said that it made no provision in its financials for the US$23 million ($3.1-billion) lawsuit.
"The company, supported by its own legal advisers, maintains that there is no causal link between its activities and the losses alleged to have been suffered by Algix Jamaica Limited, and that the claim for damages therefore appears groundless, both in terms of substance and quantification of damages," Campari said.
The lawsuit was filed by Algix in December 2015.