Raising a cheer: Brown Forman upbeat despite costs hike

HIGHER raw material costs and advertising spending dented quarterly profits at Brown Forman, the company behind the Jack Daniel’s whiskey brand.

The firm – which also makes Finlandia vodka and Southern Comfort – said costs were higher for glass, used for bottling, and corn, which is used to make its bourbon. Operating margins fell from 23.2 per cent to 22.1 per cent in the first quarter, while advertising spending rose by 19 per cent, following the launch of its Tennessee Honey product.

Brown Forman still posted higher-than-expected quarterly sales, hailing an improvement in business at North American restaurants and bars.

Chief financial officer Don Berg said: “It is probably not as healthy as what we would like it to be, but it is certainly better than what we were seeing over the past three years. And so that is all very encouraging.”

PETER RANSCOMBE