From the CEO
CEO Pekka Tennilä in the Q3/2018 Business Review (6 November 2018):
“I am pleased with the resilience that Altia has shown in the tough operating environment. Net sales grew by 0.8% in constant currencies and despite cost pushes profitability has been stable. The sales of our Nordic core brands has continued to be strong and the development in exports has been positive.
The headwind from the unfavourable currency development, especially the weak SEK, has impacted on reported net sales and on the profitability of the Scandinavia segment. The changes in the Finnish alcohol legislation and taxation at the beginning of the year have impacted negatively on the sales of spirits and wine in the Finnish monopoly.
We have been able to increase prices in all industrial products which partly mitigate the increased cost of barley. In consumer products, the increased cost of barley, puts pressure to make further price adjustments on top of ongoing revenue management.
The deliveries of barley during the autumn have fulfilled the Koskenkorva plant’s needs. After the grain price spikes in September and early October, grain prices have now stabilised at lower levels and traditionally the supply of barley activates at the beginning of the year. Based on market data it appears that the grain prices are on a descending trend.
Earlier in the autumn, it was announced that alcohol taxes in Finland will be increased as of January 2019. This unexpected decision was unfortunate following a recent significant increase at the beginning of this year. Alcohol taxation in Finland is already among the highest in the EU, and especially the taxation of spirits is high in relation to other alcoholic beverages. A higher alcohol tax level is likely to increase grey imports from abroad.
The last quarter of the year is particularly important for Altia. We have launched this year’s Blossa 18 vintage glögg and the wide range of traditional, low-alcohol and non-alcoholic Blossa’s. Christmas and New Year are a season also for Cognac gift packs, premium red wines and champagne, and for aquavit especially in Sweden and Norway. In exports of cognac to Asia, we are stocking up for one of the key events, the Chinese New Year in February."