Pernod to offload secondary brands

24 July, 2008

Pernod Ricard is planning to offload some of its secondary brands as part an asset disposal aimed to make up some €1 billion (£800 million) of €11.9 billion in debts acquired when it took over Vin & Sprit, the Swedish owner of Absolut vodka.

Managing director Pierre Pringuet said the company plans to focus on 15 core brands, including spirits Chivas Regal, Jameson and Malibu, Jacob's Creek and Montana wines and Perrier-Jouët and GH Mumm Champagnes.

But he would not comment on which brands may be up for grabs, or on whether Plymouth Gin, which has been rumoured to be a disposal target, will be among them.

The other brands in Pernod Ricard's core range are Martell, Beefeater, Havana Club, Stolichnaya (until the brand's new owner appoints another distributor, which is to be within the next six months), Kahlua, Ballantine's, Ricard and The Glenlivet.

Speaking at a press conference announcing the group's 2007-8 sales figures, Pernod Ricard UK chief executive Jean-Manuel Spriet said the UK has been hit by a sales slowdown in the fourth quarter, although it showed good growth of around 4-5% for spirits and 5-6% for wines across the year.

Overall Pernod Ricard grew its sales by 8.7% to €6.6 billion, driven by growth in emerging markets – especially China, India and Russia – and a focus on premium spirits.

Pringuet said the company was in a good position to weather even a severe downturn in the global economy, through potential cutbacks in advertising and marketing spend and cutting down on the amount of spirits distilled for ageing. He said: "We cannot speak of a general slowdown in western Europe. There is a mixed picture between countries that have been severely affected and some markets which have been quite buoyant, including the UK – except possibly in the fourth quarter."

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