Rémy Cointreau S.A.
Rémy Cointreau S.A.
Incorporated: 1724 (Rémy Martin), 1849 (Cointreau)
Sales: FFr6.8 billion
Stock Exchanges: Paris Frankfurt London
SICs: 2084 Wines, Brandy & Brandy Spirits; 2085 Distilled & Blended Liquors
Acclaimed the world over for its Rémy Martin cognacs, the group Rémy Cointreau S.A. is also a leading producer and distributor of liqueurs, spirits, wine, and champagne. The company’s VSOP, XO Special, top-of-the-line Louis XIII, and other cognacs are enjoyed throughout the world; sales of more than nine million crates per year establish the company as the top-selling VSOP-grade and higher brand of cognac in the world. Cognac is also the company’s largest source of revenue, generating approximately one-third of the group’s nearly FFr7 billion in annual sales.
Rémy Cointreau produces and distributes fine champagnes under the Krug, Piper-Heidsieck, and Charles Heidsieck labels, and champagnes under the de Venogne, Bonnet, and other labels. Champagne sales reached FFr889 million in 1996. The company’s wines, principally from the Bordeaux region, are grouped under the subsidiary Grands Vins de Gironde, and represent the entire range of wine grades, producing more than FFr732 million in sales.
Rémy Cointreau’s family of liqueurs and spirits include the famed Cointreau, a white liqueur based on orange peels; the company distributes the Italian liqueur Galliano, rums under the Mount Gay, Barbade, and Saint James de la Martinique labels, the Scotch whiskeys The Famous Grouse and The Macallan, as well as the passion fruit-based Passoa, and others. The liqueurs and spirits segment of the group accounted for nearly FFrl.4 billion of Rémy Cointreau’s 1996 revenues.
Rémy Cointreau has also built up a distribution network, Rémy Associés, placing the company among the top five alcohol-based beverage distributors in the world. Rémy Associés distributes not only the company’s own labels, but also selected labels of other liqueur, wine, and spirits producers. The group is present in over 35 countries, and distributes its products to more than 130 countries worldwide. After more than 200 years, Rémy Cointreau remains one of the largest independent producers and distributors of alcoholic beverages; the group has also remained largely a family affair, led by president Andreé Hériard Dubreuil (from the Rémy Martin side) members of both the Cointreau and Hériard Dubreuil families feature among the company’s principal shareholders and on the group’s board of directors.
Marrying Traditions in the 1960s
Founded in 1724, Rémy Martin would hold a prominent place in the growth and definition of the cognac category. Established near the town of Cognac, in the Charentes region north of Bordeaux, Rémy Martin developed a reputation for the singularity of its brandy. This singularity would soon be recognized by law. In 1850, a direct correlation was made between the Cognac region’s soil and the quality of the area’s “eaux-de vie.” This correlation would lead to the official delimitation of the Cognac region, into six zones surrounding the city of Cognac itself, in 1909. From there, the law fixed the various cognac appellations, beginning in 1936. Rémy Martin, purchasing from some 2,000 vineyards in the region, concentrated on the highest appellation of “fine champagne Cognac,” which required that at least 50 percent of the cognac’s contents came from the Grande Champagne zones immediately bordering Cognac.
Rémy Martin remained focused on its line of cognacs until well into the 1960s; the company had remained relatively small, however, ranking only 25th among the region’s cognac houses. The death of Andre Renaud, inheritor of the Rémy Martin tradition, in 1965 would lead the company to the next phase in its growth, that of developing a worldwide distribution network. Renaud’s will bequeathed the company to his daughters, with 51 percent going to oldest daughter Anne-Marie Heriard Dubreuil, and 49 percent going to her younger sister Geneviéve Cointreau. This development would also represent a first step in the later merger between the Rémy Martin and Cointreau families—and set the stage for a long-running family feud: Geneviéve Cointreau was married to Max Cointreau, one of the heirs of the popular French liqueur. Andre Heriard Dubreuil, husband of Anne-Marie and majority shareholder, was named president of the company, taking active control of operations, while Max Cointreau was named director-general.
The Cointreau company had been founded by Edouard Cointreau and his brother Adolphe near the town of Angers in 1849 to produce a white liqueur, flavored with orange peel, that would grow to become one of France’s most popular specialty drinks, particularly with its ready status as a mixer in cocktails. Cointreau, too, would remain entirely a family-run operation. In 1948, a new generation of Cointreaus took over the company’s leadership—brothers Robert and Max, and their cousin Pierre—dividing the running of the company among them, with Pierre overseeing the Angers factory, Robert in charge of developing international development, and Max in charge of the distribution network.
Max Cointreau’s marriage to Rémy Martin heir Geneviéve in 1946 would lead the two companies to a combining of forces in the late 1960s. Both companies were seeking to expand their operations, if only to maintain their independence in an industry that was beginning to show signs of consolidation. In 1969, Cointreau and Rémy Martin joined together to form a distribution network to develop both companies’ brands worldwide. In the 1970s, both Cointreau and Rémy Martin would begin expanding their product offerings, acquiring brands and production and distribution agreements to offer a more extensive line of alcoholic beverages.
In 1973, Cointreau acquired Picon, an orange-peel and quinine-based aperitif invented in 1837, as well as the rums of Saint James de Martinique. In the early 1980s, Cointreau would also add the Scotch whiskey Glenturret and the Izarra and Clé des Ducs lines of liqueurs; the company was also preparing new products, including a peach-flavored liqueur Peché Mignon, introduced in 1983, and the passion fruit-flavored liqueur Passoa, launched in 1987. For its part, Rémy Martin focused on expanding its cognac distribution, while acquiring the first of its champagne labels, Krug, in 1977, and diversifying into Bordeaux wines, acquiring the De Luze wine purchasing and exportation firm in 1980. In the mid-1980s, Rémy Martin added two new champagne labels, Charles Heidsieck and Piper Heidsieck, and toward the end of the decade added the Italian liqueur Galliano and the Barbados-based Mount Gay brand of rum. By the late 1980s, Rémy Martin, under Andre Heriard Debreuil’s leadership, had raised itself to the position of the third largest cognac house. By then, Rémy Martin’s sales had topped FFr4 billion.
Feuding in the 1980s
Trouble was brewing in the Cointreau family, however. In 1973, Max Cointreau installed son Andre as head of the newly acquired Picon label. Yet Andre Cointreau’s leadership was called into question by other members of the Cointreau family, in particular by Robert Cointreau. With 40 percent of the company’s stock against the 20 percent each held by Max and Pierre, Robert Cointreau called for an audit of the company’s operation in 1978, and restructured the company under a holding company—ending the three-member governance of the company—in which he took majority control. At the same time, Robert instituted an amendment in the company’s charter restricting sales of the family-held shares to a third party. While Pierre was named president of the new holding company, Max Cointreau was named president of Cointreau S.A., which continued to represent some 70 percent of the company’s sales of FFrl.6 billion.
Max Cointreau would not remain long as president of Cointreau—in 1982, Robert and Pierre joined together to relieve their relative of his position. Max Cointreau, in turn, threatened to sell off his 20 percent of the company to a third party, leading Robert and Pierre and the other family shareholders to harden the restrictions on stock sales to third parties. Max Cointreau was effectively forced out of all control of the company. The feuding within the family ranks was dampening the position of the otherwise healthy company. As the battle for control raged on, the company’s distribution activities fell into disarray. In 1985, however, the company moved to improve its distribution position, forming a partnership with IDV and Cinzano.
Max Cointreau, meanwhile, was faring no better on the Rémy Martin side. Tensions between the two sisters—and their husbands—flared by the early 1970s. In the late 1960s, Max Cointreau was already suggesting a combination of the Cointreau and Rémy Martin operations—envisaging himself at the lead of the combined groups, a vision that undoubtedly ran counter to those of Robert and Pierre Cointreau on one side, and Andre Heriard Debreuil on the other. By 1973, Max Cointreau, running for local office, reportedly suspected his brother-in-law Andre Heriard Debreuil of backing an opposing candidate. Cointreau won the election, but the tension among the family was mounting. The death of Anne-Marie and Geneviéve’s mother added to the simmering battle for succession of the family operation, with Max and Geneviéve chafing under their minority position. The tension finally erupted into an all-out feud in the early 1980s, when the Heriard Debreuils sought to increase the company’s capitalization, a move opposed by the Cointreaus. A flurry of court battles—some 22 or more— ensued, lasting until the end of the decade.
Merging in the 1990s
The parallel feuds with Max Cointreau had, perhaps, another effect: forging closer relations between Cointreau, led by Robert and Pierre, and Rémy Martin, led by Andre Heriard Debreuil. Faced with the growing consolidation of the beverage distribution industry, and competition against such industry giants such as Guinness, Seagrams, and Grand Metropolitan, Cointreau and Rémy Martin reinforced their joint distribution activities, forming partnerships especially focused on the Far East and the U.S. markets. The agreement would provide a boost to Cointreau, which had had only limited success in these markets. For Rémy Martin, which had based much of its growth on conquering these markets—carrying the company to the number three position in cognac sales—the addition of the Cointreau labels enabled it to present a full line of beverages. In 1988, the two companies further strengthened their links when Robert and Pierre Cointreau purchased 10 percent of Rémy Martin’s stock.
That link proved to be a bridge in November 1989 when Rémy Martin and Cointreau announced their agreement—kept secret from Max Cointreau and sons—to merge the two companies. Effected in 1990, the merged operations soon adopted the new name of Rémy Cointreau. Soon after the merger, Max Cointreau and his family sold off their shares—19 percent of Cointreau and 49 percent of Rémy Martin—to competitor Grand Metropolitan.
The merger created a company with more than FFr6 billion in annual sales, and an extensive worldwide distribution network boasting many of the industry’s most respected brands. The first half of the 1990s proved difficult years for the company: the recession of the early years of the decade, and its lingering effects on Europe, helped dampen sales of the company’s luxury-oriented products. The slipping Japanese economy—an important market for Rémy Cointreau’s cognacs— also hurt sales of the company’s core revenue generator. Nevertheless, the company’s overall revenues would post steady growth toward the middle of the decade, rising from FFr6.4 billion in 1994 to FFr6.8 billion in 1996.
E. Rémy Martin & Cié. SA; Les Domanies Rémy Martin; Krug, Vins Fins de Champagne SA et Filiales; Rémy Distribution France; Cointreau SA; Champagnes P. & C. Heidsieck; Champagne F. Bonnet P. & F.; Piper-Heidsiecl Compagnie Champenoise SA; Rémy Associés; Grand Vignobles de 1’Aube; Grands Vignobles de la Marne SA; Cointreau Holding GmbH (Germany); Hermann Joerss GmbH (Germany); Rémy Deutschland GmbH; SA Euromarques/Euromerken N.V. (Belgium); Commericial Rovirosa SA (Spain); Destilerías De Vilafranca SA (Spain); Rémy Hellas SA (Greece); Distillerie Riunite Di Liquori Spa (Italy); Acom SA (Luxembourg); Duty Free Distributors International BV (Netherlands); Jacobus Boelen BV (Netherlands); Lestada Multi—Brancch Enterprise Spolka Zoo (Poland); Rémy Calem Vinhos E Bebidas, LDA (Portugal); Denview Limited (Russia); Eurobrands Limited (U.K.); Topline DFD Limited (U.K.); Sainsbury & Company Ltd. (Canada); Vintage Consultants Ltd (Canada); Rémy de Mexico SA DE CV (Mexico); Krug Rémy Cointreau Amérique Inc. (U.S.A.); Piper Sonoma, Inc. (U.S.A.); Rémy Americas, Inc. (U.S.A.); RMS Vineyards Inc. (U.S.A.); Bodega Tres Blasones SA (Argentina); Mount Gay Distilleries Ltd. (Barbados); Cointreau Do Brasil (Licores) Ltda (Brazil); KRC Do Brasil Vinícola Ltd. (Brazil); Rémy Australia Ltd et Filales; Seguin Moreau, Australia Pty Ltd.; Rémy Coree Ltd. (Korea); Cavesde France Ltd. (Hong Kong); Remy China & Hong Kong Ltd. (Hong Kong); Rémy Japón KK (Japan); Rémy Malaisie Fine Wines & Spirits SDN Bhd. (Malaysia); Rémy Philippines Fine Wines & Spirits, Inc.; Rémy (Thailand) Ltd.
Barjonet, Claude, “Cointreau Centre Cointreau,” L’Expansion, December 19, 1986, p. 71.
Gallois, Dominique, “Une Querelle ‘Quinze Ans d’Age,’” Le Monde, November 11, 1989, p. 44.
—M. L. Cohen