Beverages: Recovery could take five years - Bryan Garnier

Marie Brizard Wine and Spirits SA

08/07/2020 13:07

** Bryan Garnier says the plunge in alcohol volumes due to
COVID-19 is set to hit the beverage sector double digits in 2020
and it could take five years to return to levels prior to the
crisis
    ** The broker adds spirits are likely to underperfom beer
short term due to their sensitivity to downtrading - consumers
switching to cheaper alternatives - and their exposure to travel
retail
    ** Bryan Garnier also sees a clear advantage for Campari
 CPRI.MI  and Pernod Ricard  PERP.PA  due to their focus on
spirits as the gap in alcohol consumption between man and women,
who prefer spirits, gets closer
    ** Bryan Garnier says it favours Diageo  DGE.L  and Pernod
Ricard (both "buy") due to their diversification in both
categories and prices
    ** It stays "neutral" on Campari  CPRI.MI , saying it has
demanding valuation and unfavourable geographic exposure, and on
MBWS  MBWS.PA 
    ** The broker downgrades Remy Cointreau  RCOP.PA  to "sell"
from "neutral" as it is likely to suffer from its exposure to
travel retail (10% of sales) and the premium and above segment
(80% of sales)
    ** HSBC says the path to recovery for the sector is far from
smooth and starts coverage of Diageo  DGE.L  with "buy", Pernod
Ricard and Remy Cointreau with "hold", and Campari with "reduce"

 ((floragomez@thomsonreuters.com))