Remy Cointreau Price Increase

Remy Cointreau (RCO.pa) announced results. Strong sales in China and Russia. Satisfactory in UK and Germany. Flat in the US. OK so lets go to across the board price increases. Or as they said in the press release: “The Group continued to implement a deliberate policy of price increases in all markets.” Then the press release concludes with this comment :

“For the financial year ending 31 March 2009, the level activity at the year end as well as the Chinese New Year will remain key. In view of the temporary cost overruns generated by the establishment of its distribution network, Rémy Cointreau does not anticipate, at this stage, organic growth in its current operating profit.”

Remy needs to reconcile its price increases to its increasing cost structure. Price increases with no bottom line implications are useless to dangerous.