Pernod Ricard sales down in Ireland

SALES OF Pernod Ricard’s brands in Ireland have declined as economic difficulties, a severe contraction in consumer confidence and a surge in cross-Border sales took their toll on the market.

However, the Irish arm of the drinks group, Irish Distillers, said there were some encouraging brand and sector performances in the six-month period ending on December 31st last. The Jameson brand outperformed the market, while sales of Absolut vodka also increased. The West Coast Cooler brand rose 91 per cent over the period, driven by new products.

Its products may have lost sales volume, but Pernod Ricard’s product portfolio won share overall in what it described as a tough environment.

The reduction in excise duty on alcohol announced by the Government in the December budget had a positive effect on the market, reducing growth in cross-Border shopping. However, the effect was limited due to its introduction in the final few weeks of the reporting period.

Irish Distillers Pernod Ricard chief executive Alexandre Ricard said this was a “welcome boost” to the industry. “Yet again, this six-month period has proven to be a very positive one for Jameson as it continued to benefit from consistent investment and support, as one of Pernod Ricard’s international, strategic brands,” he said.

“Despite the economic downturn in most markets, the global growth trend for Jameson remains consistently strong with sales volume plus-4 per cent and sales value growing plus-7 per cent, a testament to the success of the brand’s . . . strategy.”

For the wider group, first-half earnings at Pernod Ricard fell 5.4 per cent as falling US spirits sales offset strength in Asian markets, but the firm said sales were in line with its forecasts.

Paris-based Pernod said net profit from recurring operations fell to €648 million in the six months to the end of last year.

This compares to €685 million a year earlier, and missed the €659 million median estimate of five analysts surveyed by Bloomberg News. Sales fell by 10 per cent over the six-month period to €3.7 billion. Pernod was hit by a move towards cheaper brands and a drop in the numbers frequenting bars.

Currency fluctuations also lowered profit by €101 million. Profit from recurring operations rose 6 per cent in Asia and the rest of the world, driven by sales of Martell in China, local brands in India, and Absolut’s growth in Vietnam, Turkey and South Africa. – (Additional reporting: Bloomberg)