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Pernod: ‘No-deal Brexit would be short-term nightmare’
Pernod Ricard is in a “good position” to face the “short-term nightmare” of a no-deal Brexit scenario and has stockpiled products in the UK and Ireland, its executives have said.
Pernod Ricard is “very much in favour” of a Brexit deal
Jean-Christophe Coutures, CEO of the group’s Scotch whisky business, Chivas Brothers, said Pernod Ricard is “very much in favour of a deal on 29 March”, when the United Kingdom is scheduled to exit the European Union.
“The worst possible thing that could happen is a no-deal scenario as we need visibility in the way the business is going to move forward,” he said.
“At the same time, as a business we have been preparing for the worst and in the last three of four months we have been stocking some dry goods here in the UK and Ireland, which is also impacted. And we have been as well generating some extra finished goods inventory in Pernod Ricard affiliates, so no impact on Pernod Ricard turnover.
“Therefore, we believe we believe we are in a good position to deal with the short-term nightmare of what a no-deal Brexit will generate.”
Coutures also said that “long-term” Pernod Ricard and its competitors will face issues relating to free-trade agreements in some countries around the world.
Also speaking to journalists yesterday (12 February) at a media briefing, Pernod Ricard CEO Alexandre Ricard pointed out that his company is a “net exporter” from the UK due to the size of its Scotch and gin business. As such “if the British pound weakens, from a purely selfish perspective, it is good news for Pernod Ricard”.
He continued: “[Our] ambition to grow our share in the UK will obviously remain unchanged. The UK is the eighth-largest economy in the world and it is a strategic market for Pernod Ricard.”
Alexandre Ricard has also stressed his company “will remain a consolidator” in the industry, following reports that activist investor Elliott Management Corporation had recommended that the Absolut maker should explore the option of a merger.
The French group’s closest rival, Diageo, has also stressed the importance of the UK leaving the EU with a deal, but said it doesn’t anticipate Brexit will have a “material impact” on its business.