Remy Cointreau SA, France's second- biggest distiller, said first-half earnings increased 27 percent and forecast a "substantial" gain for the year as the company sells more cognac in markets such as China.

So-called current operating profit, or earnings before interest and taxes excluding some items, rose to 106.2 million euros ($142 million) in the six months ended Sept. 30, Paris- based Remy said today. That exceeded the 101 million-euro average estimate of seven analysts surveyed by Bloomberg News.

Remy rose as much as 3.3 percent in Paris trading, climbing to the highest in more than two months. Earnings growth was led by Remy Martin cognac, which the company said benefited from a "thriving" Asian economy. Liquor makers are looking to emerging markets including China to drive growth as economic turmoil in Europe restrains sales.

"Remy continues to report sector leading earnings growth," Nik Oliver, an analyst at Bank of America Merrill Lynch, wrote in a note. The brokerage has an "underperform" recommendation on the stock, citing a "full" valuation of 18 times estimated earnings, more than spirits and luxury peers.

Remy shares traded up 3 percent at 61.95 euros at 9:47 a.m. in Paris, heading for the highest close since Sept. 14.

The company said its performance remained strong in Europe, particularly in France, Germany and Russia. Remy wrote down the Metaxa brand by 45 million euros last year due to slumping sales in Greece as government austerity measures stint spending.

Eoin Treacy's view While at university I ran a tour business during the summers with an old boatman who used to say "I have a drink problem. The problem is getting money for it". That is probably a sentiment shared by many, particularly in developing countries where beverages other than water were often considered a luxury to be imbibed during festivals or at someone else's expense. As per capita incomes improve and ever larger numbers of people enter the disposable income bracket, food and beverages remain on a secular growth trajectory. (Also see Comment of the Day on October 31st).


Remy Cointreau, while considerably smaller than some other European alcoholic beverage manufacturers, is one of the few that generates the majority of its revenue in Asia. The share trended consistently higher from the 2009 low, with a succession of equally sized reactions, one above another and finding support in the region of the 200-day MA on successive occasions. The September pullback was by far the largest in the course of the medium-term advance and registered the first major inconsistency in more than two years. It has bounced back impressively and the upside can be given the benefit of the doubt provided it continues to hold above the 200-day MA, currently near €56.

Alcoholic beverage companies are among the best absolute and relative performers globally. Diageo is a European dividend aristocrat and was among the first to hit a new high following the September pullback. It continues to consolidate above 1300p and a sustained move below 1250p would be required to question medium-term scope for additional upside.

Belgian and US listed Anheuser Busch Inbev is the world's largest brewer with brands such as Budweiser, Bass, Beck's, Hoegarden, Labatt, and Stella Artois among others. The Belgian listing rallied to break the almost yearlong progression of lower rally highs earlier this month and a sustained move below €40 would be required to question medium-term scope for additional upside.

The company generates almost as much revenue from Latin America as from its North American operations. It's separately listed subsidiary Ambev (ABV in the USA) reflects this portion of its business. Ambev is also the sole distributor of Pepsi products in Brazil. The share has lost momentum somewhat over the last year but continues to find support in the region of the 200-day MA and a sustained move below $30 would be required to question medium-term scope for additional upside.

Grupo Modelo of Mexico produces Corona as well as a number of other beers and is the exclusive distributor of Anheuser Busch products in Mexico. The share consolidated above the 2007 peak for almost two years before breaking upwards in September. It continues to trend consistently and a sustained move below MXN75 would be required to question medium-term scope for additional upside.

SAB Miller lost momentum following an impressive advance from the 2008 lows and has been ranging mostly between 2000p and 2400p since late last year. It has held a progression of rising reaction lows since August and a sustained move below 2100p would now be required to question medium-term scope for a successful upward break.

Pernod-Ricard has also been largely rangebound for almost two-years and is currently rallying towards the upper boundary. A break in the three-month progression of higher reaction lows, currently near €64 would be required to check current scope for additional upside.

Brown Forman Corp is a US dividend aristocrat and yields 1.81%. The company has more than 33 brands and concentrates on spirits. It hit a new closing high today and a sustained move below $70 would be required to question medium-term scope for additional upside.

Beam Inc has rallied impressively from the August lows and is currently testing the recovery peaks. A sustained move back below the MA, currently near $26.50 would be required to check scope for continued upside.

Elsewhere in the USA Boston Beer Company has rallied to break an almost yearlong progression of lower rally highs and is currently testing the 2010 peak.

Asahi Breweries is a relative strength leader in Japan. The share has rallied well from the post tsunami lows and broke the medium-term progression of lower rally highs this week. A sustained move below ¥1575 would be required to check current scope for continued higher to lateral ranging.

While sentiment towards China's A-Share indices remains moribund, the country's consumer related sectors exhibit bull market characteristics. In the brewing and distilling sector, Kweichow Moutai has held a progression of higher major reaction lows since late 2008 and is rallying towards the September high. Wuliangye Yibin and Jiangsu Yanghe share similarly consistent chart patterns. Tsingtao Brewery's Hong Kong listing has been ranging above the 2008 peak for nearly two years and is currently rallying from the lower side.

Here is a list of 84 alcoholic and non-alcoholic beverage companies globally. The above shares represent some of the better absolute and relative performers among the alcoholic beverage sector. They tend to share the common characteristic of strong brand recognition, global reach and exposure to the growth of the middle class.