DIAGEO GAINS, WHILE PERNOD AND B-F LOSE SHARE IN AUGUST

Kaumil Gajrawala of UBS reports that NABCA volumes grew by 4.9% in August as compared to strong growth of 5.5% in August 2006. Year to date growth has been 3.8%, only slightly below the 3.9% volume growth reported for 2006.

DIAGEO, CAMPARI AND REMY GAIN SHARE. Diageo’s volume grew 5% (4.3% ytd) in August, while gaining share in Scotch, Canadian whiskey, gin, cordials and cocktails. It lost some share in vodka (+7.1% vs category +7.4%), rum (+1.5% vs category +4.2%) and tequila (+0.8% vs category +6.8%).

Both Campari and Remy gained share in the month.

PERNOD AND B-F LOSE SHARE. Kaumil notes that Pernod’s performance in August was weak at 1% (3% ytd). The company gained share in Scotch and rum, but lost share in gin, cordials and significantly in vodka and brandy/Cognac. Vodka was down -1.8% vs category +7.4%. Brandy/Cognac declined -31% vs category +4.4% where Pernod is deemphasizing Cognac VS growth, said Kaumil.

Meanwhile, B-Forman lost share with 1% growth in August as compared to flat results ytd (-0.44%).

UBS has buy ratings on Diageo, Pernod and B-F. The firm “remain upbeat about the US spirits market with volume growth expected at 2-3% and price/mix growth of 2-3%, with recent comments from Diageo management highlighting the economic resilience of premiumization.”