Pernod Ricard to make 280 workers in France redundant

Ballantine’s maker Pernod Ricard will offer redundancy to around 280 members of its French workforce under a major restructuring plan that will merge its two domestic distribution businesses.

Pernod Ricard will merge its two French distribution subsidiaries next year

The move will be made under the firm’s new strategy to regain market share in France, where its sales have declined by €60 million (US$65m) in two years.

The Paris-based group has suffered from “deflationary pressure” and the impact of Egalim Law, which has seen enhanced food and drinks regulation launched in France. Furthermore, the Absolut owner said its model of using two in-house distribution companies in France – Pernod and Ricard – has become “overly complex” and “lacks agility”.

As such, the group has proposed a domestic restructure that would see the Pernod and Ricard subsidiaries merged into a single entity – called Pernod Ricard France – from 1 July 2020.

The proposed merger would see approximately 280 roles in Pernod and Ricard’s sales and marketing departments cut through voluntary redundancies. However, around 90 new roles would be created. Pernod Ricard said it was engaging in discussions with trade unions.

Also under the project, named ‘Reconquer’, the firm will sell its Café de Paris sparkling wine brand and the Cubzac production site to InVivo Wine. The site’s 29 employees would keep their jobs.

‘Rise to the challenge’

Speaking to workers at Pernod and Ricard, Philippe Coutin, chairman of the two subsidiaries, said: “This project will be the product of several months of teamwork. We are entering into a phase of collaboration with management and unions – we hope this phase will be as responsible and interactive as possible.

“Throughout our history, the companies Ricard and Pernod have managed to evolve and reinvent themselves to continue the entrepreneurial adventure embarked upon by our founders. We have always succeeded together and together we will rise to this challenge.”

The new head office for Pernod Ricard France will be located in Marseille’s new Docks business district.

‘Reconquer’ has been launched under Pernod Ricard’s three-year global ‘Transform and Accelerate’ programme, which launched last year and aims to secure “sustainable and profitable long-term growth”. The restructure of Pernod Ricard’s domestic business is said to be “in line” with the group’s initiatives in the US, China and global travel retail.

At the end of last year, activist investor Elliott Management Corporation announced it had built a 2.5% stake in Pernod Ricard and criticised the group for launching operational improvement plans that “failed to generate operating leverage”.