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Inflation stemming from the Middle East crisis is expected to limit demand for spirits, but Campari’s pricing should mean consumers still consider its brands good value, the Italian group’s CEO told Reuters. 

Campari CEO Simon Hunt was speaking after Campari reported on Wednesday a 2.9% rise in first-quarter organic revenue, falling short of market expectations.

Hunt said the miss versus consensus was driven by destocking in the United States, while in Europe it reflected ongoing negotiations with retailers, which led to less marketing activity in stores.

"We think there will probably be a further tightening of consumer spending," he said, referring to inflation caused by the Iran war that began at the end of February.

But he said Campari's portfolio was well positioned "to still be seen as good value by consumers". The Middle East crisis resulted in a 13.5% decline in the group's global travel retail segment. Campari does not disclose the precise size of its travel sales.

"At this stage, the biggest area of cost we are seeing is coming through in petrol and diesel costs in terms of logistics", Hunt said.

"Most of our contracts on glass are longer term and most contracts have a range that we have negotiated," he said, adding he did not anticipate those ranges "being broken", although a prolonged war could change the situation.

Last week, the US President Donald Trump said that he was removing tariffs on whisky from Britain. Hunt said he did not foresee "a material impact", given UK whisky was only a small part of the Campari group's business.