Pernod: ‘We are not worried about Russia’

Following Russia’s recent embargoes on certain western agricultural imports, the deputy CEO of Pernod Ricard said he is “not worried” about the group’s spirits brands in the country.

Pernod Ricard is “not worried” about Russia’s sanctions over western imports, but is “monitoring the situation”

Last month, Russian Prime Minister Dmitry Medvedev banned a range of products from the EU, United States, Australia, Canada and Norway from being imported into the country for one year as tensions over the Ukainian crisis increase.

Spirits were exempt from the embargoes, but the Russian Federal Service for Consumer Control, Rospotrebnadzor, has banned a number of spirits brands over allegations they breach consumer rights.

A number of Ukrainian vodka brands have been outlawed, in addition to Sazerac’s Kentucky Gentleman Bourbon and Jack Daniel’s Tennessee Honey in the country’s Sverdlovsk region.

When asked at a press conference for the group’s full-year financial results whether he is concerned the sanctions could extend to all spirits, Alexandre Ricard, deputy CEO of Pernod Ricard said he is “not worried” about the situation.

“Russia accounts for 3% of our consolidated sales while imported spirits represent two-thirds of our business in Russia,” he said. “At the moment we are not concerned, however we are following the situation very closely. I can’t say anymore at this time.”

His claims come just three months after Laurent Lacassgne, CEO of Pernod Ricard’s whisky and gin arm Chivas Brothers, told The Spirits Business that the group’s whisky portfolio had enjoyed strong growth in the Eastern European region, where Russia is a “key strategy market”.

Pernod Ricard’s main competitor, UK drinks giant Diageo, said that it had a “contingency plan” in Russia to help its brands “stay on course” in case political tensions worsen.

Last week, Pernod Ricard revealed its full-year financial results for 2013/14, which saw double-digit net profit decline due to the decline of spirits in the Chinese market.

The group therefore revealed that it is in the process of cutting 900 jobs from its global business in a bid to save €150 million over three years.