- Sales for three months to June drop 9.2% to CLP201.6bn [US$240m]
- H1 revenues decline 8.8% to CLP364.8bn
- Company predicts “significant acceleration” in sales during second half
High interest rates and inventory reduction were blamed by Viña Concha y Toro for second-quarter revenues dropping by more than -9%, although the company expects its business to bounce back during the remainder of 2023.
The -9.2% cut in revenues in the three months to June represented a slight worsening of market conditions following the -8.4% sales reduction reported in the first quarter.
In the second quarter, wine volumes recorded double-digit falls in the US and for exports [which includes exports to third parties from wineries in Chile, Argentina and the US, plus sales in Argentina], and revenue declines were most pronounced in the US, with the domestic market in Chile flat.
Viña Concha y Toro blamed the declines on two factors: high interest rates causing distributors to slim down their inventories; and declining wine consumption because of inflationary pressures and lower economic growth.
Exports to the UK were up marginally in the second quarter, and revenues in Asia rose +19.5% thanks to strong growth in Japan and more moderate gains in China. However, there were double-digit declines in Latin America.
Company CEO Eduardo Guilisasti said costs had begun to fall after rising sharply in the first half of the year, adding: “Anticipating a growth in sales in the second half of the year, the company maintained marketing spending to promote brand building.
“Thus, for the second part of the year we anticipate a significant acceleration in sales, largely driven by the markets where we have our own distribution offices.”
In June, Concha y Toro unveiled a new UK push for its flagship Casillero del Diablo brand, using temperature-sensing advertising hoardings that link weather conditions to promotional cues for the wine.
Viña Concha y Toro’s official Q2 results announcement.
