Cantillon: exchange rate lifts spirits at Jameson

They must have been clinking glasses in the boardroom of Pernod Ricard in June when its Irish subsidiary, Comrie Ltd, handed over a fat dividend cheque to the French drinks giant.

Accounts filed this week showed that Comrie, the holding company for Irish Distillers Group (IDG), the maker of Jameson (which is maturing in oak barrels above), Paddy, Powers and assorted other local whiskies, paid a dividend of €140 million to the global spirits group. That was some €65 million or 87 per cent higher than the previous year.

Sales of Jameson in export markets have been galloping ahead in recent years – it is now shifting about two million cases a year more than in 2011–- but the 9 per cent rise in volumes in the 12 months to the end of June explains only part of the steep rise in the dividend payment.

The past financial year also involved a "strong favourable foreign exchange impact", notably the euro/dollar rate, IDG said in reply to a question from The Irish Times.

This makes sense as IDG’s costs are mostly denominated in euros while a substantial portion of its revenues are in dollars – the US is Jameson’s biggest market.

The weakening of the euro against the dollar and sterling can be attributed largely to the European Central Bank’s programme of quantitative easing, which has been a boon for Irish exporters generally.

So Pernod Ricard chief Alex Ricard, who ran the Irish Distillers for a period, should raise his glass to Mario Draghi.