Pernod’s Scotch sales slow in Asia

Pernod Ricard’s blended Scotch sales have begun to slow down in Asia, although demand for premium Cognac in the region remains strong.

The French drinks group, which released its H1 results for the 2012/13 financial year today, recorded a growth decline for three of its four key blended Scotch brands, with Ballantine’s falling 11% in volume, Chivas Regal down 3% and Royal Salute remaining stagnant.

Pernod Ricard suggests the results are partly due to a high comparable growth rate of 12% in H1 2011/12 for its Scotch portfolio as a whole, but noted “slower growth in Asia”, particularly in China where it claims volumes are down in general, and Korea where the “structure of the traditional on-trade continues to decline”.

Single malt The Glenlivet however bucked the trend with 17% volume growth, propelled by demand in the US, balancing the decline of its fellow Scotch brands to deliver stagnant growth for the category as a whole.

Overall, Pernod Ricard reported net sales growth for the period of 6%, up to E4.9bn, driven largely by premiumisation, emerging markets, the US and its Top 14 brands and local Indian whisky portfolio.

“The good performance achieved this semester confirms the soundness of our business model: a comprehensive portfolio of first-class international and local brands, a premiumisation strategy enhanced by a strong innovation policy, and global exposure allowing us to capture all growth relays,” said Pierre Pringuet, CEO of Pernod Ricard.

While the group’s Scotch portfolio struggled to match last year’s growth rate in Asia, its Cognac brand Martell achieved strong volume for the period (up 25%), driving Pernod Ricard’s overall growth in China up 18%.

This week the group announced the acquisition of Cognac producer Le Maine, whose stocks of eaux-de-vies would be used to strengthen Martell’s product range, aiding continued demand for Cognac in Asia.

“We are confident in continuing our growth mid-term, and we confirm our guidance of organic growth in profit from recurring operations close to +6% for the full financial year 2012/13,” Pringuet added.