Poland: Wine and spirits raise CEDC sales
strong third quarter sales rise driven by wine and spirits imports
and a less regulated Polish market. But figures must get even
better for the company to achieve its ambitious full year forecast.
The Central European Distribution Corporation (CEDC) in Poland reported a 39 per cent rise in sales totalling almost $148 million (€114 million) for the three-month period up to 30 September, compared to $105 million for the same period of 2003.
Company operating income was $16,400 at the end of September, $3,000 ahead of the same stage last year.
William Carey, CEDC chairman and chief executive, said the company had profited from "strong growth in our high margin import wine and spirit business".
The company has benefited from Poland's accession to the European Union in May this year which led to tax duties on imported spirits being significantly reduced. This has enabled retailers to pass on savings to customers, who have in turn bought more products.
CEDC's wine and spirits business had also already risen by 42 per cent over the third quarter of 2003 following the government's privatisation of Poland's alcoholic drinks market - widening competition and opening up new avenues.
As a result CEDC is aiming for 40 per cent share in the Polish spirits market within the next year and is on the look out for potential acquisitions. Last month the company bought its 13th firm, Polnis Distribution based near Lodz, for $2.37 million.
CEDC can take encouragement from growing markets. Spirits consumption in Poland stood at 2,300 hectolitres last year, having made an inspired recovery after dropping 700 hectolitres to 1,950 between 1999 and 2002. Wine consumption has been rising steadily in Poland for the last three years, moving from 4,900 hectolitres in 2001 to 5,250 hectolitres in 2003.
Beer is easily the market leader with a consumption of 28,000 hectolitres in 2003, up 1,000 from the year before.
CEDC says that its nine-month sales figures remain on track to meet full year forecasts of $549 to $559 million, though there is a lot resting on fourth quarter results which will have to hit $160 million to achieve that.
But analysts have tipped CEDC as a good investment with strong organic growth and a good network including 11 distribution centres and 70 satellite centres across Poland.
