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 The rumour of closure has been doing the round for a couple of months-in fact, I got some hint at Sulafest when I met some people working in the Remy-Sula joint venture making pure grape brandy. But the news has been confirmed now by Rukn Luthra, Managing Director of both Remy India and the Remy-Sula joint venture that under the directive of the parent company, the operations will indeed be shut down; the process has started and within 2 months the company will be closed for business.
The future of the India operations was in doubt the moment, Valérie Chapoulaud Floquet took over as the CEO of the Rémy Cointreau group in September, 2014. With the anti-graft movement in China affecting the deluxe goods and services market (yesterday China ordered shutting down of 66 golf courses), the group has been under severe pressure and the move appears to reflect the mood and predicament at the headquarters.
When contacted, Rukn Luthra, Managing Director of the India and the head of total operations of the group in the sub-continent refused to divulge any information besides confirming what was already in the grapevine and directed the enquiries from delWine to Laetitia Delaye, official spokesperson for the group in France. ‘I’m marking your email to Laetitia Delaye who is based in Paris at the Remy HQ. She will respond to your queries,’ he said in a succinct email.
Laetitia Delaye was quick to respond to our enquiries: ‘What is the reason? With other companies in the world trying to enter, isn't it a bit odd? When is it going to be shut? What happens to the staff employed? Will Sula become the de-facto sales office for Remy? What happens to Louis XIII which I am told is doing surprising well here? What happened to the Sula Remy project? I am told it has been sold to them-does it mean that the brand or the investment is being taken back?’ She declined to answer our queries specifically but was nice enough to reply.
‘Generally speaking, further to the nomination of Valérie Chapoulaud Floquet as CEO of the group (mid-September 2014), Rémy Cointreau has decided to accelerate the strategic move up-market of its brand portfolio. The implementation of this strategy could be coupled (wherever needed) with an adaptation of our distribution network and approach, in coherence with our ‘new’ long-term vision.’
While the corporate language did not clearly answer any of our questions, there was some clarity Vis-a- vis the Indian market. ‘In that context, and as for many other markets, we are studying various scenarios and options to improve our presence in India and certainly not intending to “move away.”
India remains a strategic market for us and has great potential, especially in the untapped premium and luxury segment, where Remy Cointreau’s most prestigious brands are very relevant.’
Remy Cointreau remains committed to the long-term development of its core brands in the Indian Domestic and Duty Free markets, both of which have vast potential, we think. Remy Cointreau has invested significantly in the Indian market and will continue to do so with an array of marketing programs targeting both the trade and the consumer,’ she says.
Valérie Chapoulaud Floquet has never been to India before. Therefore, the decision seems to have been inspired by the financial exigencies and the current market scenario where companies like Diageo have bought over USL with eyes on the long term market but producers like Lindt- the world renowned premier quality Swiss chocolate company reportedly packed its bags in India because of too much bureaucratic interference and lack of knowledge and respect for quality.
 The Remy-Sula could have become an eye- sore for the principles in Paris too. During my interview with Rajeev Samant of Sula at Sulafest, he had indicated to me that the product was ready; it was world class but there were bureaucratic hurdles and it would take its time to come up and an announcement would be made soon, but he also said it would be totally a Sula operations. Apparently, Remy Cointreau has now sold their equity to Sula. This could mean a pretty packet for Sula which is not likely to have paid more than 50c for the dollar for the equity. It is not yet clear if Remy will act as a consultant as the rumour has been or whether they have washed their hands clean.
Sula has been the distributor for all the Remy Cointreau products in India including Remy Martin Cognac, Cointreau and Piper Heidsieck Champagne. The future of Louis XIII is also not clear. The world’s topmost Cognac label was virtually unknown when Remy India was formed in 2010. But with shrewd marketing moves and the Brand Ambassadors stretched out globally including India, the label did a very successful job of creating a super brand image. According to my earlier interview with Rukn Luthra who refused to answer to my query about who will handle the product now, it should be currently available in 70-80 hotels across India, some of them oft-repeat customers. It has developed a cult following in Delhi’s super-affluent circuit, thanks to the buzz created by a number of focused tastings during the past four years.
The future possibility of Remy Cointreau entering for the third time seems rather remote and difficult at this point. With a strategic retreat for the second time, there may not be a third time. But the Louis XIII, Remy Martin Cognac and Cointreau will always be available at the Duty Free shops and hopefully through Sula which is expected to continue with the distribution-at least in the short to medium term.
Subhash Arora |