Rise in cigarette prices keeps major FMCG wholesalers business up

Interbrands, the biggest company specialising in consumer goods distribution saw sales go down by 35% in the first quarter, except for the cigarette unit (part of the British American Tobacco portfolio), according to the data provided by the distributor. Including sales of cigarettes, Interbrands’ business went up by 10% in RON in the aforementioned interval, to 1,029 million RON (241 million euros).

"The main reason for the decline in sales of the other categories (excluding cigarettes i.e.) was a change in the partnership with P&G: the producer started to distribute its beauty division products on its own in the major store chains this year. There are product categories in our portfolio whose sales either stagnated or went up in the first quarter of the year compared with the corresponding period of 2008, such as spices, while others, such as electronics, saw a sharp decline," specified Rand Sherif, CEO of Interbrands Marketing & Distribution. New suppliers have been added to the company’s list over the last six months such as Henkel (Loctite and Moment), Mayborn – UK’s biggest producer of accessories for babies (Tommee Tippee brand).

The distributor posted zero profit in the first quarter, after having posted 4.9 million RON losses in the same time in 2008 and 7.2 million RON losses (1.9 million euros) for the entire last year. It has taken steps to improve profitability over the last two years, such as reducing the value of the loans to repay and cutting operating costs, which could take effect in 2009.