Campari wary of $106m tariff hit as FY sales rise

Campari Group has posted a 2.4% full-year organic sales rise but has estimated US tariffs could hit the business by up to €100 million (US$106m).

The Italian group’s 2024 full-year sales were up by 5.2% on a reported basis to €3.07 billion (US$3.28bn).

Following the implementation of US president Donald Trump’s 25% import tariff on Canadian and Mexican products on 4 March, Campari Group has predicted a 12-month impact of between €90m (US$96m) and €100m on the business, before it takes any potential mitigation actions. The group is assessing what measures it will take to mitigate the impact of tariffs.

For 2025, the company expects a €35m (US$37m) impact starting from March for imports to the US from Mexico and Canada, prior to any mitigation efforts.

Regarding its 2024 performance, Campari noted consumption in all regions was affected by macroeconomic and geopolitical volatility, alongside destocking and ‘poor weather’, particularly in Europe.

Last month, Campari Group said it would ‘evolve’ its operating model to boost efficiency and focus on priority brands, after sales dropped in the third quarter.

The move would mean an organisational restructure of the business, which would result in job cuts, but the group did not disclose how many employees would be affected.

‘Transition year’

New Campari Group CEO Simon Hunt described the 2024 results as “positive” despite a “challenging year”.

Due to “cyclical headwinds”, the group said 2025 is expected be a “transition year”, with “moderate” growth estimated to continue for the year ahead.

The firm expects a single-digit decline in the first quarter of 2025 due to the timing of Easter and performance in European markets, but the second half of the year is expected to see improvement.

In the medium term, Campari Group said it expected to continue to achieve ‘mid to high single-digit organic net sales growth’.

Taking a closer look at the group’s 2024 sales, the Americas and the Europe, Middle East and Africa (EMEA) regions both posted growth, up by 4% and 3% respectively. However, sales in the US were flat and the group’s home market of Italy fell by 4%.

Germany posted growth of 5% while France was stagnant. Sales in the UK decreased by 6% due to supply constraints for rum following hurricanes in Jamaica.

Asia Pacific, which represents 7% of total group sales, decreased by 6% with Australia also down by 6%.

Apéritifs and agave on the rise

In October, the group shifted its brands into new divisions: House of Cognac & Champagne (which represents 8% of Campari’s full-year sales); House of Aperitifs (43% of total group sales); House of Whiskeys and Rum (14% of total sales); and House of Agave (10% of total sales).

The firm’s apéritifs business rose by 6%, with Aperol up by 5% and Campari increasing by 9%.

The House of Whiskeys and Rum experienced a 6% decrease after Wild Turkey and Russell’s Reserve (down by 2% collectively) suffered a ‘soft performance’ in the US and Australia, which offset double-digit gains in Japan and other European markets from a small base. Other whisky brands, including The Glen Grant Scotch brand, fell by 10%.

The Jamaican rum portfolio, which includes Appleton Estate and Wray & Nephew, fell by 5% due to supply issues stemming from the hurricane in July.

The agave arm grew by 10%, driven by Espolòn Tequila (up by 14%) which soared in the US.

However, other agave brands (such as Montelobos Mezcal, Ancho Reyes and Cabo Wabo Tequila) declined by 14% as the group focused on ‘fast-growing’ Espolòn.

The Cognac and Champagne business grew by 2% with Cognac-based liqueur Grand Marnier rising by 1%.

Other Cognac and Champagne brands in the portfolio increased collectively by 11%, mainly led by Lallier Champagne but partially offset by Bisquit & Dubouché Cognac.

The organic sales performance of Courvoisier, which Campari acquired from Suntory Global Spirits for US$1bn in May last year, will be included from May 2025. The group said the Cognac brand recorded €75m (US$80m) in net sales between May and December 2024 with ‘progressive investment’ in the US.

Local brands, which make up 25% of group sales, dipped by 1% last year. The decrease was attributed to Skyy (down by 8%) as a result of ‘persisting challenges’ in vodka trends in the States.

Hunt noted that the group’s “leadership position in apéritifs presents an ever-growing opportunity given the evolving consumer trends” and combined with its premium spirits portfolio and Tequilas, there is “significant potential” for global expansion.