Pernod Ricard first-half profit boosted by demand for Jameson
Irish Distillers’ whiskey portfolio records 5 per cent increase in sales in Ireland
Irish Distillers said value growth for Jameson whiskey product rose 20 per cent for the six months ending December 31st.
Jameson, the world’s best-selling Irish whiskey, continued to record impressive sales in the latter part of 2016, with volume growth up 16 per cent.
Irish Distillers, the Pernod Ricard subsidiary that owns Jameson and a number of other well-known whiskey brands such as Powers, Redbreast and Green Spot, said value growth for its flagship product rose 20 per cent for the six months ending December 31st.
Sales of Jameson were particularly strong in the United States, its top market, with 23 per cent growth last year. Sales were boosted by Caskmates, a variation that is aged in craft-stout-seasoned oak barrels.
The firm’s whiskey portfolio, which has an 83 per cent market share in Ireland, recorded a 5 per cent hike in sales over the reporting period, with 13 per cent value and volume growth in its “prestige” brands.
The group’s parent, Pernod Ricard, the world’s second-biggest spirits group behind Diageo, posted higher first-half sales and profits on the back demand for Jameson in the US and for Martell cognac in China.
The French spirits group also flagged improving trends in travel retail and in Russia, as well as tight cost control.
One trouble spot, however, was slower sales growth in India as a government’s ban on high-value notes held back local whisky brands consumption, which the group said was likely to continue in the second half.
Pernod said it still faced an uncertain environment, and it kept its annual profit growth outlook unchanged.
First-half group sales reached €5.06 billion, an organic rise of 4 per cent, while profit from recurring operations reached €1.5 billion.
This compared with analysts’ expectations of €5.02 billion in sales and €1.48 billion in operating profit.
Second-quarter sales rose 4 per cent, beating estimates of 3.2 per cent growth, and reflecting an increase of 6 per cent in the United States, 5 per cent in Asia and 1 per cent in Europe.
In China alone, sales rose 4 per cent in the first half, driven by a 10 per cent rise in Martell cognac sales, although scotch whiskies continued to suffer.
Hit like other spirits makers by a sales downturn in China sparked by a government clampdown on extravagant spending, Pernod Ricard has launched a sales drive there.
China contributes about 9 per cent of Pernod Ricard sales against 17 per cent for the US.
Pernod’s peers have confirmed China was returning to growth with Remy Cointreau and Hennessy reporting robust sales supportive of a recovery.
The owner of Absolut vodka, Martell cognac and Mumm champagne kept its target for an organic rise of between 2 per cent and 4 per cent in profit from recurring operations for the year ending June 30th, 2017.