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Pernod sales rise despite slowdown in China and Western Europe
By Amy HopkinsPernod Ricard has battled an economic slowdown in China, France and Spain to deliver a profit increase of 6% for 2012-13, describing its performance for the year as “solid”.
Pernod Ricard saw an overall profit increase of 6%, with substantial growth in the US and decline in the emerging marketsAnnouncing its FY 2012/13 sales and results, the French drinks group recognised a dip in Chinese, French and Spanish markets, but strong growth in the US.
This growth has enabled the group to post full-year sales of €8.57 billion – including €5.0bn from mature markets and €3.5bn from emerging markets – an overall increase of 4%.
Pierre Pringuet, vice chairman and chief executive officer of Pernod Ricard, said: “Despite a less than buoyant environment than that of last year, we achieved our guidance.
“Our global and balanced exposure to emerging and mature markets will allow us to seize all opportunities. We therefore remain confident in our ability to pursue growth.”
Noting that “premiumisation and innovation” are key drivers of growth, the group said that its high-end brands had increased their share of sales from 73% to 75%.
In particular, the performances of the Jameson and Martell brands were described as “outstanding”, while Pernod Ricard’s growth was also largely attributed to the solid sales of its white spirits (including Absolut, Havana Club, Beefeater and Malibu).
Martell Cognac enjoyed a particularly strong performance in China, Malaysia, Indonesia and travel retail with a 15% increase in sales, while Jameson grew 26% in the US and 17% overall, reporting double-digit growth across all major markets.
It was also noted that while the sale of Indian whiskies remained buoyant – thanks predominantly to the performance of premium brands Royal Stag Barrel Select and Blender’s Pride Reserve Collection – the sale of Scotch whiskies declined in China, South Korea and Thailand.
While China in particular saw double-digit growth for Martell and Absolut, Scotch whiskies and exclusive spirits suffered a “challenging year”.
The group’s homeland France saw a 7% dip in sales which has been blamed on a steep rise in excise duty introduced at the beginning of 2013 against the backdrop of a recession and poor spring weather.
In the US there was a reported overall growth of 8%, while local brands grew 7%, attributed to innovations in the emerging flavoured American whiskey segment.
Advertising and promotion expenditure totaled €1.64bn, an increase of 3% that was pumped into the the group’s top 14 brands, that accounted for almost 90% of the increase.
Looking to the coming year, Pernod Ricard anticipates sustained growth in the emerging markets, on-going good growth in the US, and improvements in the Western European markets in the face of continued difficulties.