Freixenet Copestick turnover reports slight dip in sales

UK wine supplier Freixenet Copestick has reported a slight dip in its turnover during 2022 according to accounts filed at Companies House, but sales remains well above pre-pandemic levels. 

The UK arm reported turnover of £136.8million in the year to 31 December 2022, coming in around 0.83% under its £137.9m peak in 2021, its accounts notes – an increase of around 15% on the 2020 mid-pandemic £118.5m figure. The company also reported gross profits up 22% to £21.2m, up from £16.5m last year, although operating profits were recorded as £159,176, compared to a restated loss of £261,335 in the previous year.

However, an overall loss for the financial year was reported as £358,484, compared to a £1.180m loss in 2021, it said. The figure for 2021 followed a restatement of the 2021 figures to account for an error that was discovered in the 2021 transfer pricing calculation (a calculation made when goods or services are exchanged between divisions of the same company) it said, which found there had been an increase in balance owed to group companies of £3,986,750.Previously it had reported operating profits before amortization rise from £4.5 million in the year ending 31 December 2020, to £6 million in 2021, with net profits hitting £2.805 million profits.

CEO Damian Clarke noted in the director’s report that the company’s decision to invest heavily in its brands had led to a market growth of 0.5%, while the total off-trade wine market declined by -7.3% (IRI 52 weeks to 25 December 2022). “This approach combined with significant increases in the cost of goods led to turnover growth of 1%,” he said.

Managing cost increases due to inflationary pressure was “key to maintaining profitability”, the company noted, pointing to the continued uncertainty around key costs, notably the cost of raw materials, energy and freight.

“The cost of living crisis being experienced across the United Kingdom also presents the risk of consumers switching to less premium products altering the mix of sales within our portfolio, however the directors believe this risk is mitigated through maintaining strong trading relationships and support for our brands,” Clarke wrote.

The company’s key brands in the UK market include Spanish cava brand Freixenet, Italian Prosecco brand Mionetto and the ‘i heart’ range of largely varietal wines, which primarily retail through the multiple grocers and convenience channel.

In August, it unveiled a brand refresh for its flagship ‘I heart’ wine brand, which it said had delivered 5% YOY growth, ahead of the wider category, which was in -3% YOY decline. “It is picking up momentum thanks to its relevance in positioning in tough economic times,” a spokesman said at the time.

The group is owned by German sparkling wine giant, Henkell Freixenet, and the UK arm includes subsidiaries, Slurp Wine Company, Jascots Wine Limited, which it acquired in December 2020 and English sparkling wine producer Bolney Wine Estates and Bolney Vineyards, which it acquired in January 2022, for an undisclosed sum, and a 50% stake in Bordeaux negociant Yvon Mau.