As Theresa May triggers Article 50, Pernod Ricard has confirmed that price increases have been implemented across its UK portfolio due to sterling’s devaluation after the Brexit vote.
Pernod Ricard has raised prices within its UK portfolio
In a presentation published ahead of an investors’ conference, Christian Porta, CEO and chairman of Pernod Ricard EMEA & LATAM, said the price hikes were first applied in March 2017 to combat the impact of higher inflation resulting from the strong currency decline.
Addressing journalists following the publication of French group Pernod Ricard’s H1 financial results earlier this year, Laurent Pillet, recently appointed managing director of Pernod Ricard UK, declined to confirm any price rises.
However, he said the group would look at optimising the cost of imported goods, review operational efficiencies – such as where staff and resources are allocated – and “consider” potential price increases.
“Long-term, very transparently, [maintaining margin] is not sustainable, we are impacted on our margin because the cost of goods imported is more expensive in sterling than it used to be in the past,” he said.
Christian Porta, CEO and chairman of Pernod Ricard EMEA & LATAM
“On a temporary basis we can absorb part of it, but in the long-term we need to impact part of this to our consumers.”
Last year, Pernod Ricard predicted that its global business would make £30 million in its 2016/17 fiscal year as a result of a weaker pound.
UK prime minister Theresa May today (Wednesday 29 March) signed a letter that will trigger Article 50 and formally begin the UK’s departure from the European Union.
The Wine and Spirit Trade Association (WSTA) said it will “stand together” with European partners to “maintain free flow of trade”, claiming Brexit will “bring both challenges and opportunities” for UK wine and spirits producers.
“We stand together with our European trade association partners in our joint ambition to secure free trade flows,” Miles Beale, chief executive of the WSTA, said today.
“We have repeatedly said to government since the referendum that the only way to achieve its aim for a frictionless Brexit is for the government and industry to work in partnership.”