JWN rum sales down $1b athalf-year
Rum sales by market leader J. Wray & Nephew Limited, JWN, totalled €41 million, or $6.4 billion in local currency, over the first six months of the year.
Sales revenue were down 12 per cent in the period due to a curtailment of business in the entertainment industry, inclusive of bars, and other COVID-19 mitigation measures.
In reporting the numbers, JWN’s parent Campari Group said the overall decline was “due to on-premise closures and reduced touristic flows, amplified by a tough comparison base”.
Revenue underperformed last year, despite “continued momentum in Wray & Nephew Overproof Rum,” the Milan, Italy-based spirits company reported in financial results released on Tuesday.
In April, most areas for public purchase and enjoyment of alcohol were temporarily banned or closed, including live events, festivals and bars. The lifting of the restrictions began in June.
DROP IN SALES
For JWN, the lockdown meant that there was about €6.2 million (about $1 billion) less in sales than a year earlier. What’s more, the 12 per cent decline in Jamaica was at markedly faster pace than the 9.4 per cent drop across the entire group, which holds assets in the Americas, Africa-Middle East-Southern Europe, and Asia Pacific.
The geographic segment that includes Africa was the biggest drag on the group with a decline of 25 per cent.
In addition to the impact on sales, the local operations announced it started a restructuring programme for the agricultural sugar business in St Elizabeth in July. It comes as the business racked up “significant losses over the years”, in addition to current woes attributable to COVID-19. Jobs are now in jeopardy with unions brought in to negotiate on behalf of workers.
“A consultation process with the local authorities and trade unions started with a view to reach the best possible outcome for the local community. A one-off provision, covering the expected restructuring costs associated with the project, will be included in the group’s results as a result of the consultation process,” Campari said.
The Italian company acquired the spirits holdings of the Lascelles deMercado & Company group in 2012, inclusive of subsidiary JWN. Campari subsequently rebranded the Jamaican operation under the JWN name.
Since the acquisition, Campari’s capital investment in Jamaica has amounted to $14 billion, according to a release issued by the spirits company in May.
The investments include the US$7.2m upgrade to the rum tour, and its rebranding as the Joy Spence Appleton Estate Rum Experience; a US$7 million expenditure on the rum-making wastewater plant at the Appleton Estate factory in St Elizabeth; and J$700 million investment in a wastewater treatment system at the Spanish Town Road operations in Kingston. JWN also spent an undisclosed sum on a LNG-fired plant to run its distillery at New Yarmouth in Clarendon.