Pernod bolstered by Sales of Whisky in India

Pernod Ricard said that its results for the first half year of 2009-10 were in line with forecasts. They were helped by a strong performance in emerging markets, which off-set other difficulties.

In terms of world regions, Asia/Rest of the World was again the strongest performer, recording 6% growth, helped by the ‘vitality’ of local whisky brands in India, including Royal Stag and Blender’s Pride.

The depreciation of the American dollar contributed to a 22% decline in recurring operations in the Americas. In Europe, the equivalent decline was 18%. However France enjoyed 5% growth, helped by improved product mix.

Overall, Pernod maintained advertising and promotion at a high level of B642 million, with the aim of developing its strategic brands. It also reduced structure costs by 3% to B559 million, helped by downsizing outside of emerging markets, and wage restraint. Debt was reduced by B565 million with the help of the disposal of Tia Maria brand. In total, Pernod's sales were B3,789 million, down 3%.

Champagne sales were nothing to celebrate for Pernod, with Mumm and Perrier Jouet declining by 11% and 16% respectively. However, this was ameliorated by a 7% increase for Jameson of 7% and an increase for Absolut of 5%.

The difficulties for Pernod around champagne sales were echoed by a BBC report that exports of champagne fell by almost a third last year. Overseas sales of French wines and spirits recorded their biggest ever annual decline. Exports of champagne fell 28% to 1.6bn euros last year. The Federation of French Wine and Spirits Exporters blamed the global recession for leading US and UK consumers to turn to ‘cheaper New World brands’.

23 February 2010