DRINKS group Remy Cointreau said yesterday that its whisky sales had

risen 20% in the nine months to December, thanks to the strength of the

Highland Distilleries' Famous Grouse and the Macallan Glenlivet brands

in markets where it acts as distributor.

The joint Heriard Dubreuil family and Remy investment in the industry

is now worth #85.4m, being the 10% of Highland currently worth #46.6m,

with Highland 14p better at 373p, while the 26% holding in Macallan is

valued at #38.8m at 127p.

In return, Highland has an indirect 16% stake in Remy (about #108m at

present) as well as board representation.

Joint managing director Francois Heriard Dubreuil confirmed that there

is no intention of changing the Macallan holding.

Overall group turnover rose 6.2% to Fr4665m (#525m) although sales of

cognac were affected by two factors.

One was the decision of the Chinese Government on December 15 to

impose 17% VAT on retail sales as from January 1 this year. That is

despite no traders having been issued with VAT numbers in advance.

Cognac sales stopped for obscure reasons but have suddenly revived to

the extent that Remy is now having to supply the most important market

40% of the total by plane.

The other depressant was over-stocking in the US in 1992 because of a

build-up in 1992 ahead of a threatened trade war. However, that market

is now moving back into balance.

Champagne sales have recovered strongly in the UK but are flat in

Europe, while Cointreau is now benefiting from its fresh marketing which

is changing the image of it as a Christmas-only liqueur.

Profits for the six months to September rose 24% to Fr129m (#14.5m)

and the full-year total could improve from Fr202m to a little over

Fr250m.

Remy is much less exposed to Japan than the Guinness 24%-owned

associate LVMH and so has not suffered the effects of cognac price

discounting which has lowered some prices by two-thirds in Tokyo.

The shares rose Fr5 to Fr255 in Paris, where they sell at around 25

times earnings in a market that is high in liquidity and short of stock

at present.