Bongrain puts brave face on sales decline

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French cheesemaker Bongrain sees sales drop 4.4 per cent in the
nine months to the end of September, but stresses that cheese sales
began to recover in the third quarter, auguring well for the rest
of the year.

A 4.4 per cent drop in sales in the nine months to 30 September has been shrugged off by French food group Bongrain, which preferred instead to emphasise the recovery in international cheese markets during the third quarter.

Bongrain, which is present in more than 150 countries worldwide with brands such as Caprice des Dieux, Tartare and Alouette, reported sales of €2.86 billion in the nine month period, compared to €2.99 billion a year earlier. It said that a change in the scope of consolidation, as well as currency exchange rates and the general weakness in global dairy ingredient markets, were to blame for the decline.

Bongrain itself registered a 1.6 per cent increase in sales to €1.73 billion during the period, but the decline came mainly from its Compagnie Laitiere Europeenne (CLE) subsidiary, where sales fell 10.1 per cent to €1.1 billion.

Sales were boosted by the consolidation of Advanced Food Products in the US from 1 March 2001 and by TPK in the Czech Republic from 31 December 2001, but were reduced by the disposal of the group's milk collection and drying operations in France in April and by the closure of Interlac in Belgium.

The weakness of the US dollar in the third quarter also took its toll on results, adding to the woes caused by the devaluation of currencies in South America, where the group has operations in Brazil, Argentina and Chile.

Cheese sales in both France and Germany increased during the third quarter, however, as the company increased its sales force there. This also helped boost sales of butter and UHT cream. Bongrain's brands performed well in South America despite the poor economic conditions there, and the core cheese business performed well in all other markets.

There was also a slight recovery in the global market for milk powder during the third quarter, Bongrain said, but stressed that prices were still lower than those seen in 2001 and that turnover had been impacted as a result.

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