Pernod Ricard eyes Asia brand acquisition

Pernod Ricard’s finance head Gilles Bogaert has said that while the group would consider acquiring a fast-growing premium spirits brand to pursue growth in China, it is “not obsessed with M&A”.

Gilles Bogaert said bolt-on acquisitions could be a way for Pernod Ricard to target more consumers in China

Speaking in London earlier this week, Bogaert said that in order to target more people in China, Pernod Ricard could buy a new spirits business, adding that he is “glad” the company has not moved into the baijiu category.

He also claimed that the return to growth of domestic Chinese spirit baijiu is “good sign” that consumption is once again on the rise following hefty declines caused by a long-running austerity campaign.

“This is positive for the whole spirits market in China,” he said. “But we are glad we didn’t buy any baijiu brands three or four years ago because there’s a bubble there. Before we targeted 30 million people, but now we want to four times more consumers, so we could be open to add new business to our portfolio.

“We could add some fast growing premium brands, why not? It shouldn’t necessarily be in baijiu.”

The group suffered in China in its latest financial year, with total sales in the market dropping 9%. Pernod’s Scotch portfolio recorded double-digit losses in the country, claiming its Cognac brand, Martell, is “more resilient” as it is part of a “more established” category in China.

Bogaert added: “We are not obsessed about M&A, we are obsessed about growth, but M&A could be good to add complements to our fast growing brands. We are going for a bolt-on approach.

“In the US we have room to increase our share and in specific emerging markets, and also to strengthen our route to market. These things we are monitoring on a constant basis. We have made acquisitions in recent years and we could do more in the future.”

At the start of this year, Pernod Ricard bought a minority stake in German gin brand Monkey 47 for an undisclosed sum.