Chupa Chups back in the red again
Lollipop maker posts loss as initial tie-up costs provide sweet sorrow.
2 January 2008
BARCELONA - Barely 18 months after being bought by Dutch-Italian outfit Perfetti Van Melle, Chupa Chups, the world's biggest lollipop maker, is back in the red.
The Barcelona-based company recorded a loss of EUR 30 million in 2006 after a profit of EUR 2.5 million a year earlier as sales stagnated at EUR 116 million.
Chupa Chups' new general manager, Giorgio Maritan, says the firm's results for 2006 reflected the acquisition by Italian-Dutch group Perfetti van Melle in July 2006 after years of losses. "In the first year following a merger, it is hard to grow," says Maritan.
Following this operation, the Italian-Dutch group merged all of Chupa Chups' subsidiaries, some of which were loss-making, into a single company and sold French subsidiary Afchain at a loss. In addition, there were financial expenses relating to restructuring provisions for relocating operations.
Maritan, however, predicts Chupa Chups will see its sales in the Spanish market rise more than 6 percent to close to EUR 60m in the current financial year, which will be enough to avoid operating losses in 2008.
Based in Barcelona, family-owned Chupa Chups was established in 1940 by Spanish businessman, Enric Bernat, whose son Xabier took over the running of the company in 2004.
The lollipops went on sale in 1958, and 10 years later Salvador Dali, friend of Enric Bernat, designed the current logo. Bernat was a pioneer in merchandising, and shopkeepers were told to keep special Chupa Chups stands right next to the cash register.
Within five years, Chupa Chups were sold at 300,000 outlets in Spain, and Bernat renamed the company after its flagship brand. The Chupa Chups Group produces four billion lollipops a year, which are sold in 40 flavours in 170 countries. In the past the company has pulled off a number of unusual marketing tactics, on one occasion sending lollipops into space.
Chupa Chups also manufactures mint candy under the SMINT brand and had previously joined forces with Perfetti in marketing their products throughout Europe.
Chupa Chups and Perfetti formed their first business relationship in 1999 when they set up a joint German partnership and last year they launched the British firm, Chupa Chups Perfetti van Melle UK.
Formed in 2001, Perfetti van Melle is a merger of the Italian company Perfetti and Dutch confectioner Van Melle.
It is now the world's fourth largest confectionery company. The company employs 650 people in Spain, and more than 12,000 worldwide in some 30 factories.
[Copyright El Pais / SERAFÍ DEL ARCO 2008]
Subject: Spanish news