Elected again as President of the United States, Donald Trump plans to tax all imported products and establish a universal tax of 10% on all products manufactured abroad. And even up to 60% on those coming from China. These measures of its economic program will concern in particular the wine and spirits sector. On the Paris Stock Exchange, Pernod Ricard and Rémy Cointreau fell respectively by 3.52% to 109.65 euros and by 5.30% to 53.65 within the CAC 40 and the SBF 120.
In an analysis note last October, Oddo BHF cited Rémy Cointreau as one of the European stocks most at risk in the event of the election of Donald Trump.
“The Trump administration had implemented a tax on imports of wine, cognac and Scotch whiskeys of around 25% from 2019/2020 which had been suspended by his Democratic successor Joe Biden. returned to power, these taxes could be put in place again, said Arnaud Autier, spirits analyst at Oddo BHF. According to the latter, they would primarily affect Rémy Cointreau, of which 30% of current operating profit (EBIT) is generated via the. sale of cognac in the United States
If this additional 25% of customs duties were passed directly to the consumer, this would represent approximately 10 years of price increases in the American cognac market. Assuming no price increase during a similar period and a slight reduction in volume growth potential, the loss of Ebit would be around 40 million euros per year on a group Ebit. of 305 million euros in 2023/2024.
“In such a context and given the threat of tax on cognac imports into China, the performance of Rémy Cointreau shares should continue to be under pressure while waiting to have more visibility on these elements and tangible signals of resumption of cognac”, observed Arnaud Autier.
