Confirming the report, Frédéric Heidsieck, export director of the family-owned Louis Roederer Champagne House in Reims, who is in Delhi on a business visit said the news had been all over the French media but could not explain why this step had been taken so suddenly although he knew they were making losses and that they had had some serious union problems recently. He also expressed surprise on the timing as Christmas is a good time for promotions and the announcements may not auger well for the sales.
Credit Agricole-CIB has been engaged to find a suitable buyer for the unprofitable champagne division which posted an operating loss of €4 million in April 2009-March 2010 with sales declining by 24%, according to a statement by the company earlier this June. Remy had also said earlier this year that the company would cut 45 jobs at the unit to counter the slump.
The sale of the unit will be subject to the necessary procedures in accordance with current regulations, the Paris-based distiller said in a statement. Remy is a traded stock on the Paris stock exchange, selling at around € 52. The stock has gained 48 percent this year, giving Remy a market value of €2.56 billion ($3.5 billion).
Piper- Heidsieck Champagne is being imported by the Indian subsidiary-Remy Cointreau India Pvt Ltd and is distributed by Sula. Remy had recently announced very ambitious plans to try and take on the leader of imported Champagnes, Moet et Chandon.
Rukn Luthra, Managing Director of Remy’s Indian subsidiary also had the knowledge of the announcement through media. He says that the company perhaps decided to focus on spirits and as it is, the Champagne companies had been losing money during the last couple of years. Luthra had gone very aggressively in the market and had confided to delWine in a recent interview that he would like to make it a number two brand.
The news could be music to Vijay Mallya’s ears. Thwarted by the Champagne producers who strongly opposed an outsider buying a Champagne house, the boss of UB-group beer and liquor company (though he also makes wines now through the Four Seasons), he had to forego the purchase of Taittinger a few years ago and had settled for Loire Valley based sparkling wine producer Bouvet Ladubay. He could pitch in once again and get two-for-one offer- i.e., both the Heidsieck labels along with the production facility.
Incidentally, Frédéric Heidsieck is the sixth generation descendent of Charles Heidsieck’s brother Henry. Known as ‘Champagne Charlie’, the former had been responsible for setting up the Champagne house with his name and popularizing Champagne in the US in the mid-nineteenth century.
Subhash Arora |